Hyundai managed to sell $1.45 billion bonds backed by auto loans, after it increased the size of the transaction by $200 million.
“The top-ranked portion from the Seoul-based automaker sold yesterday and maturing in 2.1 years yields 10 basis points more than the benchmark swap rate,” said a person familiar with the transaction.
As asset-backed deals soar to $114 billion in the first half of this year, up 66% from 2011, Hyundai raised the size of its transaction. Since the car makers account for almost $54 billion of the transactions, issuance is being helped by the rising demand in auto sales.
According to Fitch Ratings investors are snapping up the debt with delinquencies holding under 1%. On February 28th Hyundai made its previous asset-backed sale, a $1.35 billion offering. The company paid extra 16 basis points compared to the benchmark interest rate on a top-ranked slice maturing in two years.
In June US auto sales beat analysts’ estimates, accelerating to a 14.1 million seasonally adjusted annualized rate, according to researcher Autodata Corp. A group of 15 analysts made an average estimate of 13.8 million light-vehicles.