Ford, GM Leading $5.8 Billion in Planned Asset-Backed Securities
Ford, the second-largest U.S. automaker, plans to sell $1.15 billion of so-called floorplan debt as soon as tomorrow, according to a person familiar with the offering who asked not to be identified because terms aren’t set. Honda and GM Financial each plan to market $1 billion of bonds linked to auto loans, according to a person with knowledge of the transactions.
Automobile debt accounted for about $97 billion of the $258 billion of asset-backed bonds tied to consumer and business lending issued last year as vehicle sales surged, according to data compiled by Bloomberg.
Total U.S. deliveries of cars and light trucks climbed 13 percent to 14.5 million last year, the highest since 2007. Industrywide car and light truck sales in the country rose 9 percent in December, trailing the 9.8 percent average estimate in Bloomberg’s survey of analysts. The industry capped a third- straight annual gain of at least 10 percent, a streak last achieved in 1973.
Ally Financial Inc. (ALLY) is selling $940 million of securities tied to vehicle loans as soon as this week, said a person familiar with the offering. Ally’s planned deal, its first offering tied to non-prime auto loans, would allow proceeds from loan payments during the first 12 months to be directed to purchase of new loans for a collateral pool, Moody’s Investors Service said today in presale report.
“In the term markets, it is unusual to finance an amortizing asset with revolving debt,” Mack Caldwell, head of Moody’s auto ABS ratings team, said in an e-mailed statement. “The revolving feature was used in the term markets for autos in a few transactions that closed in the first decade of the new millennium.”
Other companies planning asset-backed bonds include Bayerische Motoren Werke AG, which is planning to sell $1 billion in securities linked to leases as soon as this week, according to a person familiar with the offering. Macquarie is planning to issue $500 million of auto asset backed securities, which may price this week, said a person with knowledge of the deal. First Investors intends to issue $187 million of the debt, a person familiar with that offering said.
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