Auto ABS volume to trickle as investors ‘close their books’

© Can Stock Photo / Elwynn

Auto asset-backed securities volume has reached $99.2 billion as of Nov. 1, a 5.4% increase compared with last year, according to JPMorgan Securities. Yet, the auto ABS market will likely experience a slowdown in volume as yearend approaches. 

“A lot of folks need to get deals out before Thanksgiving, then they are finished for the year,” Hylton Heard, senior director at Fitch Ratings, told Auto Finance News. “After Thanksgiving, there is a slug [in demand].” 

In fact, investors typically “close their books” by Dec. 1, having completed their funding allotments for the year, Heard said. 

To that end, a handful of lenders combined to bring $4.2 billion of auto loan and lease issuance to market today. On the dealer floorplan side, Nissan Motor Acceptance Corp. issued $1.25 billion transaction, while Ford Motor Credit ramped up its volume with its third floorplan issuance of $1.05 billion, according to a presale report by S&P Global. Year-to-date, Ford Credit has issued $5.5 billion in floorplan notes. 

Meanwhile, American Honda Finance issued $1.35 billion in bonds backed by new and used Honda and Acura retail loans. As for lease receivables, Hertz Vehicle Financing issued its third transaction of the year, with $567.15 million coming to market.

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