All articles by Fred Crawley
Fred Crawley
UK motor finance paper backs Q1 bond trading
Lloyds Banking Group (LBG) has sold bonds backed by Black Horse Motor Finance loans, in the latest sign that UK retail motor paper may be looked upon favourably by capital markets. The bank put together 130,000 hire purchase contracts, worth £768m, to back its bonds, and went on to sell £250m of sterling-denominated bonds and 300m of euro-denominated bonds at par.
Strength of UK POS keeps finance levels high
The UK motor finance industry achieved a 5.1 percent greater annual lend in 2010 than in 2006, according to data published by market research company Finaccord. The report, Automotive Finance and Leasing for Consumers in Europe, highlights the resilience of British motor finance compared to the industries of other countries
Cost of funds rising ahead of bank rate
Funding costs for motor finance providers are on the rise, as markets are bracing themselves for interest rate rises over the coming months. Last weeks Bank of England inflation report revealed consumer price inflation to have risen to four percent in January, with a further rise to five percent or more possible before the end of the year. Bank governor Mervyn King has insisted that reactionary bank rate increases are not a certainty, but this has not stopped markets pricing in anticipation of a 1.25 percent rate.
Close hires Irish growth gurus
The figures behind the establishment of some of Irelands largest motor finance providers have been chosen by Close Motor Finance (CMF) to build a presence for the lender in the Republic, through new joint venture First Auto Finance (FAF).
Black Horse to sell bonds
Lloyds Banking Group is to sell bonds backed by Black Horse Motor Finance loans, in the latest sign that UK retail motor paper may be seen as a strong asset by capital markets.
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Editor’s letter: Talkin’ ’bout the next generation
Last week in the offices of a UK motor lender, a conversation about the history of the company took a tangent when a staff members two-year-old child wandered through the room. His mum works in collections and his dads on the underwriting desk theres a good chance that kid is going to end up in car finance,” the MD reflected.
Wholesale used car values drop 4.4% in 2010
Manheim Remarketing reports that overall average wholesale used car values fell by 4.4% (£306) in 2010, compared with 2009 The average age increased by three months to 51 months, and the average mileage rose by 4,009 to 53,605 miles.
MF still on cards for Davenham despite vote against takeover
Plans to raise a fresh motor finance operation from the run-off of asset finance lender Davenham Group plc have been obstructed by the decision of its shareholders not to support a replacement of the companys board. David Anthony, the former CEO of Hitachi Capital in the UK, had enlisted ex-Moneyway chief Gary Jennison to help him take control of the struggling lender, with an eye to reigniting lending with Jennison at the helm as CEO.
Taking stock
Stock funding, a long-established, but often overlooked, feature of the dealer finance landscape, is becoming a popular tool of choice for non-captive lenders and even for bank subsidiaries with no presence in retail motor finance. While captive funders still dominate stocking for new vehicles, the much larger used car market is seeing the manufacturer position eroded by brand-independent lenders such as Santander Consumer Finance, RBS asset finance subsidiary Lombard, Close Motor Finance and BMW multimake finance venture Alphera.
Hitachi acquires NVR in a bid to increase UK presence
Hitachi Capital, of which HCVS is a subsidiary, has embarked on a major push to increase its UK presence, powered by increased funding commitment from its Japanese parent. The fleet acquisition has accompanied a spate of hires and new business lines within the groups general asset finance division, Hitachi Capital Business Finance, while HCVS has implied it is looking at more acquisitions in the near future.