Carmaker Hyundai may soon be back in securitization markets on both sides of the Canada-U.S. border after signing new agreements to handle financing.
Hyundai Auto Canada will likely see some of its lease products enter the ABS markets after signing on to a joint venture with Newcourt Credit Group subsidiary FinanciaLinx.
While Toronto-based Newcourt has had its own concerns lately (see pg. 1) it still continues to bring new issuance to the market, albeit at lower levels than previous years.
Though the new joint venture, called Hyundai Financial Services, the carmaker's 142-strong Canadian dealer network will use FinanciaLinx's Internet-based leasing program to sign up new clients. "Our customers will be able to access a wide range of financing options," said Steve Kelleher, vice president of sales for Hyundai Auto Canada. "Our dealers can now offer the fastest credit approval process for automobile financing in Canada."
Hyundai has always farmed out its lease operations in Canada, most recently with CIBC, but before that with the PRIMUS arm of Ford Motor Credit. Hyundai moved about 22,000 cars in Canada last year, for a total value of C$374 million ($267 million). About half that amount is in leasing.
Funding for FinanciaLinx lease products is shared between Newcourt and Bank of Montreal, while the latter also tends the lending program at Hyundai.
In the U.S., Hyundai Motor Finance Corp. is mulling over a return to the ABS market after an absence of more than a year. "We're looking at the marketplace," said David Hoeller, vice president of finance at Hyundai in the U.S.
The firm's last deal was a car loan-backed issue for $300 million brought by Salomon Smith Barney in April 1998. Rumors also have Salomon Smith Barney involved in the next deal.
Any new deal would definitely involve loans, said Hoeller, as GE Capital looks after the firm's leasing arrangement in the U.S. and securitizes those receivables through its existing programs.
Hyundai is enjoying a booming year so far, with sales up 40% year-over-year as of May. The carmaker's loan originations were in the $200 million to $250 million range in the U.S. last year. - TC