TALF newcomers Hyundai Motor Finance Corp. and Chesapeake Funding LLC, a unit of PHH Corp., are getting set to issue auto-backed securitizations next week.
Hyundai’s $1.3 billion securitization, the captive’s first this year, will be backed by prime loans secured by new and used cars and light-duty trucks. Chesapeake’s issuance, meanwhile, will consist of $750 million worth of fleet leases.
Other financiers slated to return to the TALF market for the Sept. 3 round: Bank of America and Ford Motor Credit, each with $2 billion of issuance, and Nissan Motor Acceptance, with $1 billion of issuance.
Including the volume expected for September, auto ABS issuance should hit about $38 billion so far this year, outpacing 2008’s total volume by $3 billion. Looks like TALF is getting the job done.
No help if you live in a state without a sales tax. Great if you live in Manhattan.
And at 4% per annum (that’s what my bank credit line charges) the interest deduction isn’t very big for some purchasers. You get more if you know how to shop incentives.
I agree with Marcie that we shouldn’t expect much impact: if current high discounts aren’t moving the metal, this size increment won’t do much. But some of our people on the Hill can claim they’ve helped the industry….
mike smitka
Marcie:
This is exactly the enviornment we were calling for back in April. Remember GMAC still has about 4 Billion yet to issue and that debt will have FDIC insurance allowing GMAC to borrow for less than 3%. The auto market is going to get flooded with new paper by year end. It will be interesting how much pent up demand was swallowed by CARS and how many transactions will get done due to the new financiang availabilty. All of this new financing should help the used market immediately.
Interesting point about the new volume because of CARS — wonder if we’ll see even higher TALF volume in October.
Another point about the used market, though — prices are certainly improving, but some used-car dealers have told me that traffic is in the dumps because so many people bought new to cash in on their clunkers. Seems like it might take a while before things rebound.