Lehman Bankruptcy, BofA-Merrill Deal Changes Auto ABS Landscape

Auto Finance News

This weekend’s remarkable events surrounding Lehman Brothers Holdings, Bank of America Corp., and Merrill Lynch & Co. changes the landscape for automotive securitizations.

BofA just last week spearheaded one of the more important auto loan securitizations of 2008, a $5.7 billion deal. There have been scant auto ABS deals so far in 2008, and this deal also successfully went to market despite a concentration of collateralized SUVs and trucks and in the wake of the Fannie Mae and Freddie Mac conservatorship. Now, after agreeing to acquire Merrill Lynch, BofA immediately steps into the forefront of auto finance investment banking.

Lehman, meanwhile, departs the scene. Lehman led or co-managed $7.2 billion of auto finance ABS last year, about 8% of total issuance in 2007. AmeriCredit Corp. deals accounted for $3.8 billion of Lehman’s total underwriting business last year.

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