A subsidiary of Ford Motor Credit has become the first wholly foreign owned auto finance company to securitize auto loans in China.
“Ford Automotive Finance (China) has been adding both dealers and retail customers quickly in China, and we will support Lincoln when the brand arrives later this year,” Nu Tran, president of Ford Credit Asia Pacific. “We now have another funding tool to support their financing needs.”
The deal, Fuyuan 2014-1 Retail Auto Mortgage Loan Securitization Trust, issued a total of 800 million renminbi of securities under a pilot program governed by the China Banking Regulatory Commission and the People’s Bank of China.
Two tranches were priced via a Dutch auction, according to a document posted on Ford Motor Credit’s website. A 680 million renminbi tranche with an expected maturity of November 2015 was priced at par for a coupon rate of 5.5%. A 72 million renminbi tranche with an expected maturity of May 2015 was priced at par for a coupon rate of 9%.
“This is a significant transaction, as it helps increase our access to the capital markets in China in support of the One Ford growth plan,” Tran said. “It also supports our global strategy of funding diversification and funding our business locally.”
Ford Credit has been securitizing assets since 1989 and has public and private programs in the United States, Europe, Canada, Mexico as well as China.
Ford Credit’s subsidiary in China began operations in 2005. It provides wholesale financing for more than 400 dealers and retail financing through nearly 500 Ford dealerships in 290 cities across China.