Honda Motor Co. sold $1.69 billion of bonds backed by auto loans in the carmaker’s largest issue of the debt since July 2009, according to a person familiar with the offering.
The sale was increased from $1.25 billion, said the person, who declined to be identified because terms aren’t public. A top-ranked portion maturing in 2.2 years yields 18 basis points more than the benchmark swap rate.
Bond offerings connected to automobile sales are dominating asset-backed sales this year. Deals linked to car and truck sales account for $10 billion of the $18 billion in 2012 asset-backed issuance, excluding Honda’s offering, according to data compiled by Bloomberg. Sales of the securities may jump 11 percent to about $63 billion this year, accounting for about 55 percent of bonds tied to consumer borrowing, according to Wells Fargo Securities LLC estimates.
The extra yield investors demand to own top-ranked bonds backed by auto loans instead of Treasuries has declined 25 basis points this year to 69 basis points and last week reached 67, the lowest since Aug. 1, according to a Bank of America Merrill Lynch index. A basis point is 0.01 percentage point.
Honda, based in Tokyo, sold $1.83 billion of bonds backed by auto loans in July 2009, Bloomberg data show.
Nissan Motor Co. is issuing $1 billion of asset-backed securities similar to the debt issued by Honda, a person familiar with that sale said. Ally Financial Inc. is offering $750 million of so-called floor-plan bonds, which are linked to payments from dealerships on inventory loans.
Ford Motor Co. last week sold $2.3 billion of floor-plan debt in its largest offering of the securities since 2005, Bloomberg data show. The sale was increased from $1 billion. The top-ranked portion maturing in 1.92 years priced to yield 47 basis points more than the one-month London interbank offered rate, or Libor, the rate at which banks say they can borrow in dollars from each other.