OREANDA-NEWS. Fitch Ratings expects to assign the following ratings and Rating Outlooks to the AmeriCredit Automobile Receivables Trust 2016-3 (AMCAR 2016-3) as follows:

--$173,000,000 class A-1 notes 'F1+sf';

--$310,000,000 classes A-2-A/A-2-B notes 'AAAsf'; Outlook Stable;

--$243,880,000 class A-3 notes 'AAAsf'; Outlook Stable;

--$78,890,000 class B notes 'AAsf'; Outlook Stable;

--$97,930,000 class C notes 'Asf'; Outlook Stable;

--$96,300,000 class D notes 'BBBsf'; Outlook Stable;

Fitch does not expect to rate the class E notes.

KEY RATING DRIVERS

Consistent Credit Quality: The 2016-3 pool displays consistent credit quality relative to recent pools based on the WA Fair Isaac Corp. (FICO) score and internal credit scores. Extended term contracts (60+ month loan terms) continue to account for the majority of the pool, while new vehicles total 57%, higher than recent AMCAR transactions.

Increased Extended-Term Contracts: 60+ contracts total 93.5% of the pool, the highest concentration for the platform. 2016-3 is the first AMCAR pool rated by Fitch to include 73-75-month contracts, totaling 3.3%. Performance data for these contracts is limited due to lack of seasoning. However, GM Financial offered the 73-75-month loans in this pool to obligors with stronger credit metrics. Given this fact and the small concentration in the pool, Fitch did not apply an additional stress to these loans.

Sufficient Credit Enhancement: Initial hard credit enhancement (CE) is consistent with 2016-2 but higher than recent transactions. CE for classes A, B, C and D is 35.20%, 27.95%, 18.95% and 10.10%, respectively. Excess spread has decreased to 7.19% per annum from 7.65% in 2016-2.

Stable Performance: Losses on GM Financial's managed portfolio and securitizations have been stable and relatively low, supported by the currently stable economy and healthy used vehicle values. Contrary to other nonprime lenders, recent vintage performance has not exhibited any notable weakness with losses remaining stable for 2013-2015 vintages to date. The cumulative net loss proxy for this pool is 11.30%, in line with 2015-4, the last Fitch-rated transaction.

Improving Corporate Health: Fitch rates GM and GM Financial 'BBB-' with a Positive Outlook. The corporate rating and recent Rating Outlook revision reflect the ongoing fundamental improvement in the company's core business over the past several years.

Consistent Origination/Underwriting/Servicing: AFSI demonstrates adequate abilities as originator, underwriter and servicer as evidenced by historical portfolio and securitization performance. Fitch deems AFSI capable of adequately servicing 2016-3.

Legal Structure Integrity: The legal structure of the transaction should provide that a bankruptcy of GM Financial would not impair the timeliness of payments on the securities.

RATING SENSITIVITIES

Unanticipated increases in the frequency of defaults and loss severity on defaulted receivables could produce loss levels higher than the base case. This in turn could result in Fitch taking negative rating actions on the notes.

Fitch evaluated the sensitivity of the ratings assigned to AmeriCredit Automobile Receivables Trust 2016-3 to increased credit losses over the life of the transaction. Fitch's analysis found that the transaction displays some sensitivity to increased defaults and credit losses. This shows a potential downgrade of two categories under Fitch's moderate (1.5x base case loss) scenario, especially for the subordinate bonds. The notes could experience downgrades of three or more rating categories, potentially leading to distressed ratings (below 'Bsf'), or possibly default, under Fitch's severe (2.5x base case loss) scenario.

DUE DILIGENCE USAGE

Fitch was provided with third-party due diligence information from Deloitte and Touche, LLP. The third-party due diligence focused on comparing or recomputing certain information with respect to 225 loans from the statistical data file. Fitch considered this information in its analysis and the findings did not have an impact on our analysis/conclusions. A copy of the ABS Due Diligence Form-15E received by Fitch in connection with this transaction may be obtained through the link contained on the bottom of this rating action commentary.

Fitch's analysis of the Representations and Warranties (R&W) of this transaction can be found in the reports titled 'AmeriCredit Automobile Receivables Trust 2016-3 -- Appendix'. These R&W are compared to those of typical R&W for the asset class as detailed in the special report 'Representations, Warranties, and Enforcement Mechanisms in Global Structured Finance Transactions' dated May 31, 2016.