A slow leak may drain the gas tank on Nissan Motor Acceptance Corp.'s securitization plans this year, according to Tomoaki Shimazu, the firm's vice president of finance and corporate planning.

While Shimazu would not entirely rule out a securitization later this year, he said owing to Y2K considerations, Nissan would likely avoid the fourth quarter; so any chance of a sale would have to be in the fall. The company last issued asset-backed debt in December 1998.

Shimazu said there were several factors behind the lack of securitization activity. Primarily, he said, is slowing business for Nissan Motor Acceptance. While its automaker parent Nissan Motor Corp. has been experiencing a downturn in overall sales in the past couple of years, the bigger problem for the finance unit is the aggressive competition from bank lenders, according to Shimazu.

He said that Nissan's penetration of the financing segment of the sales process has been declining, with the company now providing for financing of only 25% of its new car sales, compared with an average of 40% of sales in more recent years.

He said the banks are very active in all financing areas and Nissan is now faced with many competitors for the car buyer's business. He referred to the bank's efforts as "quite aggressive."

Shimazu added that he did not anticipate any changes in the nature of the company's operations in the U.S. in the wake of the marriage between Nissan and France's Renault S.A. Nissan has seen its worldwide sales slump over the past couple of years and losses have been mounting.

The carmaker is currently introducing its 2000 models for some of its key auto lines, including the popular Maxima, which has won acclaim from several auto critics. Shimazu said he was hopeful that success of these cars would spur business for his unit.

The just announced settlement of a legal dispute with AutoNation Corp. could cut into the firm's car loan business, Shimazu said, since AutoNation has its own financing arrangements. However, much will depend on how many dealers end up going under the AutoNation banner. He noted that in the past Nissan's relationship with AutoNation was a friendly one. There is nothing in the agreement that specifically deals with the financing of new car sales, he added.

Two weeks ago the two companies settled a dispute as to the number of Nissan dealers that AutoNation was allowed to own. The agreement will allow AutoNation to acquire more Nissan dealerships.

In its last trip to the credit markets, Nissan Motor Acceptance sold $1 billion of triple-A rated Nissan Auto GT 1998-A asset-backed debt, through a syndicate headed by Chase Securities and J.P. Morgan. The $889 million A-tranche notes were priced to yield 5.59% with a 5.45% coupon, while the $110 million class-B notes were retained as credit enhancement.

- David Feldheim

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