(Corrects description and name of Hyundai unit in first and second paragraphs of story published yesterday.)
Honda Motor Co. and Hyundai Motor Co.’s U.S. finance unit are leading companies marketing at least $5.1 billion in asset-backed bonds tied to everything from car loans to student borrowings amid a surge in issuance.
Hyundai Capital America plans to sell $1.5 billion of bonds tied to vehicle loans, according to a person with knowledge of the offering who asked not to be identified because terms aren’t set. Honda, Japan’s second-largest carmaker, is selling $1 billion of bonds tied to auto loans that may price this week, a person with knowledge of that transaction said.
Issuance of debt tied to consumer and business lending is rising as U.S. auto sales grow the fastest in more than four years. Sales of $9.2 billion this month follow about $20 billion in all of September, bringing 2012 offerings to about $152 billion, data compiled by Bloomberg show.
“We expect a continued steady flow of new issue auto ABS, which facilitates U.S. vehicle sales,” Citigroup Inc. analysts led by Mary Kane said in an Oct. 5 report.
Vehicle sales in the U.S. averaged a 14.5 million annualized rate in the third quarter, the fastest since the 15.3 million pace set in the first quarter of 2008, according to Woodcliff Lake, New Jersey-based researcher Autodata Corp.
Other companies planning asset-backed bonds include Sallie Mae, which is issuing $976 million of debt tied to student loans, and Porsche AG, which is selling $527 of bonds backed by auto leases, people familiar with the sales said. CAI International Inc. will issue debt tied to shipping containers, and Home Loan Servicing Solutions Ltd. is marketing bonds backed by servicer advances.
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