Despite declining retail business, resulting in lower levels of managed receivables available to back securitized bonds, Ford Motor Credit Co., the financing unit of Ford Motor Co., plans to issue more ABS backed by auto loans and leases in 2006.
The company aims to generate between $140 billion and $145 billion in managed receivables in 2006, and will increase asset-backed securities to between 49% and 53% of its total funding, said K.R. Kent, the finance unit's chief financial officer, during a presentation to analysts in New York City last week. In 2003, Ford Motor Credit financed about 25% of its $175 billion in managed receivables through securitization. In 2005, its managed receivables slipped to $150 billion, but the securitized portion increased to 38%. Although the proportion of securitization to the company's total funding has increased since 2003, Kent said the company could push those levels even higher. Kent declined, however, to specify what limits the company might put on tapping the ABS market for funding, despite analysts' skepticism about how much of its loans and leases could be reasonably securitized.