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FORT WORTH, Texas — General Motors Financial reinforced its
allegiance to its parent automaker with moves revealed during its latest
quarterly conference call.

While acknowledging that competition is ramping up within
its subprime used-vehicle financing business, GM Financial is making plans to
roll out a prime retail program early next year.

GM Financial president and chief executive officer Dan Berce
explained this prime financing initiative is being initially targeted at GM
dealers with whom the company already has a commercial lending relationship.

"We have world class systems and processes for originating
and servicing subprime loans, but these will need some refinement to support
prime lending, such as system enhancements to speed decision and funding times
and customer service processes that ensure consumer loyalty and retention for
the GM brand," Berce said during last week's conference call with investment
analysts.

"Our final comment on our prime lending initiative: Although
we believe prime lending will provide us with strong growth in our earning
asset base over time, we are not seeking to become the predominant prime
lending provider for GM dealers or supplant the banks and other providers in
this market," Berce continued. "Our goal, simply put, is to provide GM dealers
with a full suite of consumer products to go along with our commercial suite."

Berce touched on the prime product again when asked about
heightened competition in the subprime space. Berce said that GM Financial is
seeing increased competition within the segment where AmeriCredit typically operates.

"We're seeing heightening competition mainly through
start-ups and capital formation behind smaller lenders. That's mainly at the
bottom end of subprime, maybe not in the sweet spot. Nevertheless, that trend I
think will get even more intense over the next say 18 months," Berce said.

"Our strategy is we're a captive and first and foremost here
to support GM vehicle sales. If we end up losing some market share on the used
side because we retain our credit standards and maintain our return objectives,
so be it," he went on to say.

Q1 Performance

GM Financial reported that its first-quarter net income
softened year-over-year, settling at $106 million for the quarter ended March
31. A year earlier, the company generated $112 million.

In terms of consumer loan originations, GM Financial posted $1.4
billion, in Q1, up slightly on a sequential basis and flat year-over-year. In
the fourth quarter of last year, the company's originations came in at $1.2
billion.

Officials indicated the outstanding balance of consumer
finance receivables totaled $11.2 billion at March 31.

Lease originations of GM vehicles shot up to $620 million in
the first quarter, rising from $265 million in the previous quarter and $384
million in the year-ago period.

Net Leased vehicles constituted $2.1 billion of GM Financial's
portfolio as of March 31.

Turning to portfolio performance, the company reported consumer
finance receivables 31-to-60 days delinquent came in at 4.3 percent, compared
to 3.2 percent as of the close of last year's first quarter.

Accounts more than 60 days delinquent constituted 1.5
percent of the portfolio at March 31, compared to 1.2 percent a year ago.

Annualized net credit losses were 2.6 percent of average
consumer finance receivables for the first quarter, compared to 2.5 percent for
the same quarter last year

"We expanded our underwriting guidelines really beginning
2010 all the way to mid 2011, and really haven't made any appreciable changes
since," Berce said. "That is creating a bit weaker mix today certainly than
three years ago. That's contributing at the margin to the delinquency increase,
but I'd say the bulk of it is normalizing of consumer behavior.

 Consumer behavior
over the last couple of years has been extraordinary," he continued. "On the
auto side, there was a clear trend to paying the auto first and the mortgage
wasn't near as important.

"That behavior may be abating a bit as more people get
equity in their home and maybe the mortgage is becoming a bit more important
again. Those are subtle trends. From a historical perspective we're seeing
exceptional performance both delinquencies and losses," Berce went on to say.

GM Financial also pointed out it had total available
liquidity of $3.3 billion as of March 31,  consisting of $2.9 billion of unrestricted
cash, approximately $108 million of borrowing capacity on unpledged eligible
assets and $300 million on a line of credit from GM.

GM Financial Announces Offering of Senior Notes

In other company news, GM Financial announced today that,
subject to market conditions, it intends to offer $2 billion aggregate
principal amount of senior notes in various tranches.

GM Financial said plans to use the net proceeds from the
offering of the notes to fund a portion of the acquisition of the international
auto finance and financial services businesses of Ally Financial, to repay
certain indebtedness to General Motors pursuant to its inter-company loan from
GM and for general working capital purposes.

Officials explained the notes will be offered only to
qualified institutional buyers in accordance with Rule 144A and to non-U.S.
persons under Regulation S under the Securities Act of 1933, as amended.

"The notes have not been registered under the Securities Act
or any state securities laws, and may not be offered or sold in the United
States absent such registration or an applicable exemption from the
registration requirements of the Securities Act and applicable state securities
laws," GM Financial said.

"This press release does not and will not constitute an
offer to sell or the solicitation of any offer to buy the notes or any other
securities, nor shall there be any sale of the notes in any jurisdiction in
which such offer, solicitation or sale would be unlawful prior to registration
or qualification under the securities laws of any such jurisdiction," officials
went on to say. "This press release is being issued pursuant to Rule 135c under
the Securities Act."

Nick Zulovich can be reached at nzulovich@subprimenews.com. Continue the conversation with SubPrime Auto Finance News on LinkedIn and Twitter.