Subprime Auto Loan Probe Fails to Curb Surging Bond Sales
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The U.S. government probe into auto loans made to people with spotty credit is doing little to derail sales of bonds backed by the debt, even as investors demand more to own the riskiest pieces.
Lenders are planning about $2.3 billion of securities that are either predominantly backed by subprime loans and leases or include significant chunks of the debt. The offerings include a $1.35 billion transaction being marketed by Santander Consumer USA Holdings Inc., its first offering since disclosing last month it received a civil subpoena from the Department of Justice that’s part of a probe into lending practices.