Volkswagen Pays Least for Aussie Asset-Backed Bonds Since Crisis
Volkswagen AG (VOW), the German carmaker that’s doubled the number of own-brand and Audi vehicles on Australian roads since 2008, paid the least to sell asset-backed bonds in the country since the financial crisis.
The manufacturer, which finances 28 percent of its cars globally, priced top-rated bonds backed by auto loans at 85 basis points more than swaps, the tightest spread on similar debt in six years, data compiled by Bloomberg show. Macquarie Leasing Pty Ltd., part of Australia’s largest investment bank, paid a 95 basis-point spread for similar-maturity notes backed by auto and equipment receivables in September, the data show.
Debt offerings supported by assets including motor loans slid 5 percent this year as issuers instead ramped up mortgage-backed bond sales. Lenders have sold A$24.4 billion ($22.8 billion) of notes supported by Australian home loans since Dec. 31, already the busiest year since 2007, as low interest rates and rising house prices boosted September dwellings sales to the highest since June 2011.
“It’s an impressive result,” said Justin Davey, a portfolio manager at BT Investment Management Ltd., which has about A$58 billion of assets under management. “It adds to portfolio diversification as there haven’t been many Australian auto deals by manufacturers that consist primarily of their own cars and are undiluted by other asset types.”
Macquarie Leasing was the last issuer to pay less than VW for similar notes, selling debt with a 1.95-year average life at a 60 basis-point spread in November 2007, data compiled by Bloomberg show.
VW’s A$433 million of AAA rated securities have a 1.38-year average life, data compiled by Bloomberg show. The company also sold A$26 million of notes with a 2.39-year average life at 180 basis points more than swaps, the data show.
The company started marketing the larger class of notes at a premium of about 90 basis points earlier this week, a person familiar with the matter said at the time, asking not to be identified because the terms weren’t set.
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