Bloomberg News

Hyundai Sells $1.45 Billion of Asset-Backed Debt in Record Offer

July 10, 2012

Hyundai Motor Co. (005380) sold $1.45 billion bonds backed by auto loans, its largest offering on record of the debt, after increasing the size of the transaction by $200 million, according to a person familiar with the transaction.

The top-ranked portion from the Seoul-based automaker sold yesterday and maturing in 2.1 years yields 10 basis points more than the benchmark swap rate, said the person, who asked not to be identified because terms aren’t public.

Hyundai raised the size of its transaction as asset-backed deals soar to $114 billion in the first six months of this year, a 66 percent increase from the same period in 2011, according to data compiled by Bloomberg. Issuance has is being helped by rising automobile sales, with car companies accounting for about $54 billion of the transactions.

Investors are snapping up the debt with delinquencies holding under 1 percent, according to Fitch Ratings. Payments more than 60 days late from borrowers with the best credit stood at 0.33 percent in April, Fitch said in a May 31 report.

Hyundai’s previous asset-backed sale was a $1.35 billion offering issued Feb. 28, Bloomberg data show. The company paid 16 basis points more than the benchmark interest rate on a top- ranked slice maturing in two years.

U.S. auto sales for June topped analysts’ estimates, accelerating to a 14.1 million seasonally adjusted annualized rate, researcher Autodata Corp. said in a July 3 statement. The pace topped the 13.8 million light-vehicle rate that was the average estimate of 15 analysts surveyed by Bloomberg.

To contact the reporter on this story: Sarah Mulholland in New York at smulholland3@bloomberg.net

To contact the editor responsible for this story: Alan Goldstein at agoldstein5@bloomberg.net


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