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Ford Motor Co
General Motors Co
CNH Global NV
Ford Motor Co. (F) leads companies selling $3.4 billion in asset-backed securities as auto debt dominates the market.
The carmaker is offering $1.08 billion of bonds backed by auto loans, according to people familiar with the transaction who asked not to be identified because terms aren’t public. GM Financial, the provider of loans to buyers with poor credit acquired by General Motors Co. (GM), is selling $1 billion in similar debt, the people said.
Automobile debentures account for $92 billion of the $213 billion of asset-backed bonds linked to consumer and business lending issued this year as vehicle sales surge, according to data compiled by Bloomberg. Dearborn, Michigan-based Ford has issued $5.2 billion of the securities tied to loans in 2012, up from $2.52 billion last year, the data show.
U.S. light-vehicle sales rose 14 percent to 11.99 million this year through October, according to researcher Autodata Corp. That puts the U.S. on pace to increase annual deliveries by at least 10 percent for the third consecutive year, the first such streak since 1973.
Top-ranked securities linked to auto loans are yielding 28 basis points more than Treasuries, down from 94 basis points on Dec. 31, according to a Bank of America Merrill Lynch index. A basis point is 0.01 percentage point.
Other companies selling asset-backed securities include CNH Global NV (CNH), the agricultural machinery maker, and brand manager Iconix Brand Group Inc., the people said. CNH, based in Amsterdam, is issuing $677 million in debt backed by equipment loans. Iconix is marketing $500 million of bonds tied to trademarks and license agreements.
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