Bloomberg News

Toyota Leads Firms Selling $2.89 Billion of Asset-Backed Debt

September 17, 2012

Toyota Motor Corp. is leading companies selling $2.89 billion in asset-backed bonds amid a surge in issuance.

The automaker is marketing $1 billion of bonds tied to auto loans, according to a person familiar with the transaction who asked not to be identified because terms aren’t public. The securities may be sold as soon as tomorrow, the person said.

Automobile debt accounts for about $67 billion of the $159 billion of asset-backed bonds linked to consumer and business lending issued this year, according to data compiled by Bloomberg. JPMorgan Chase & Co. boosted its 2012 asset-backed forecast to $190 billion, according to a Sept. 14 report. The bank predicted $145 billion in sales in December.

“Demand remains insatiable,” wrote New York-based analysts Amy Sze and Kaustub Samant. “With the market rallying around QE3, the consumer ABS sector should continue its strong performance.”

The Federal Reserve said on Sept. 13 it will expand its holdings of long-term securities with monthly purchases of $40 billion of mortgage debt in a third round of quantitative easing as it seeks to boost growth and reduce unemployment.

Asset-backed issuance is growing as car sales rise. Industrywide vehicle deliveries this year through August climbed 15 percent to 9.71 million, according to researcher Autodata Corp. in Woodcliff Lake, New Jersey. Sales are on pace for the best year since 2007.

Other companies marketing asset-backed bonds include CNH Global NV (CNH:US), the Amsterdam-based agricultural and construction equipment maker, and Fairfield, Connecticut-based General Electric Co. (GE:US), people familiar with the sales said. Both deals are linked to equipment loans. Enterprise Fleet Management Inc. is issuing $600 million of debt tied to vehicle lease contracts, one of the people said.

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

To contact the editor responsible for this story: Shannon D. Harrington at sharrington6@bloomberg.net


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