Santander Consumer USA raised the expected price on its initial public offering today to the $24-to-$25 range from $22 to $24 per share.
Santander also increased the number of shares it will offer to 75 million from 65 million.
It is being reported that the Santander IPO, which would raise upwards of $1.8 billion, will price tonight and begin trading tomorrow.
Market sources say the deal was well oversubscribed prior to the upsize today — at least five times, according to some estimates, International Financing Review reports.
As Auto Finance News reported Jan. 9, the lender has applied to be listed on the New York Stock Exchange under the symbol “SC.” Santander maintains lending relationships with Chrysler, CarMax and other partners. After the IPO, Santander Consumer USA plans to diversify its financing products and increase the volume of its new-vehicle financing in the prime space, according to the company’s SEC filing today.
Through September 2013, more than 80% of the lender’s loans were subprime. With a greater focus on prime lending, a larger proportion of SCUSA’s business will consist of loans for which it has less flexibility to adjust pricing to absorb losses.
Of course OnStar already knows my location and can send an ambulance – I opted in for that. I didn’t opt in to give OnStar to right to shut down the car if some collections agent claims I owe them money. And even if I agree to a default clause in the loan contract, unless I have specifically granted OnStar the right to shut down my car based on a third-party claim, I’m suing them if they shut down my car because a third party claims I missed a payment.
The GPS system vendors and lenders who use them can only operate with full disclosure and explicit consent, which is exactly what would be required to do this via OnStar or whatever.
Mike’s original premise was along the lines of, “Why didn’t somebody think of this?” Somebody did. I was actually working for one of the original companies that provided some of the technology when OnStar was launched. Our company provided some of the pieces of the voice recognition. That software could also do voice verification, meaning voiceprints could potentially be used for securing things. Ideas like this one were part of those discussions and the lawyers spoke loud and clear – the risk of liability far outstripped the potential benefits. That’s also the case here. Why would OnStar want to risk its relationship with its customers to help out a few collections agents? It’s all risk and little to no money for OnStar, so it seems an unlikely proposition, except possibly as a direct substitute for the current GPS trackers for the same low-end swath of the credit spectrum, in cars that already had OnStar installed.