UPDATE: Ford Unit In EUR474.45M Triple-A German Auto ABS Sale

24th Jun 2010 14:27

(Adds detail, background) By Mark Brown Of DOW JONES NEWSWIRES LONDON (Dow Jones)--FCE Bank PLC, a unit of Ford Motor Co.(F), has sold EUR474.45 million of triple-A rated asset-backed securities backed by German auto loans via a private placement, bankers involved in the transaction said Thursday. The bonds priced at par and pay a coupon of 160 basis points over one-month Euribor. They have a weighted average life of 2.19 years. They were sold via FCE Bank's Globaldrive program, by a vehicle called Globaldrive 2010-A. A EUR28.3 million single-A rated tranche of bonds, and a EUR26.786 million unrated tranche, were retained. Deutsche Bank AG, HSBC Holdings PLC, and Royal Bank of Scotland Group PLC were joint-lead managers on the transaction. ABS are backed by repayments on credit assets such as credit cards and auto loans. They are often divided up into tranches, with different exposures to losses in the underlying loans. The portfolio backing the Globaldrive 2010-A bonds is comprised of 41,517 German auto loan contracts with an average balance of EUR12,755. ABS were an important source of consumer finance before the collapse of the U.S. subprime mortgage market all but killed investor appetite for new deals. Returning investor confidence enabled the European primary market to re-open last year, and earlier this week, RCI Banque, the financing arm of France's Renault SA (RNO.FR), announced plans for a public sale of EUR873 million of triple-A rated ABS, also backed by German auto loans. In January, FCE Bank sold just over EUR300 million of ABS in another private placement from Globaldrive, in what was the first European ABS sale of 2010. But investors have been wary of ABS backed by anything other than what they regard as the best performing collateral, and new deals priced since the market reopened have been backed almost exclusively by German auto loans or U.K. and Dutch mortgages. In May, Volkswagen Finance SA postponed a planned EUR686.25 million ABS issue backed by Spanish auto loans, as volatility in the sovereign bond market spilled over into the European ABS market. More ABS issuance would boost the supply of consumer and household credit, and is therefore seen as a key support for the European economic recovery. -By Mark Brown, Dow Jones Newswires; + 44 (0)207 842 9485; [email protected] (END) Dow Jones Newswires June 24, 2010 09:27 ET (13:27 GMT)