Business / Companies

GM unfreezes asset-backed market as loans triple

(China Daily) Updated: 2012-10-26 11:05

A General Motors Co venture is selling China's first notes backed by auto loans since the global financial crisis in 2008 amid forecasts that debt will fund three times more car purchases within five years.

Loans from GMAC-SAIC Automotive Finance Co will back the 2 billion yuan ($320 million) sale of securities by Cofco Trust Co, the issuer said in a statement on Oct 11. Globally, automobile debt accounts for $90 billion, or 45 percent, of bonds secured by consumer and business lending this year, according to data compiled by Bloomberg.

Borrowing funded about 10 percent of vehicle purchases in the world's largest auto market last year, a ratio that China Minzu Securities Co estimates will triple by 2017 as young people buy their first cars. Cofco Trust's offering comes after China restarted the market last month, following a four-year suspension that followed the collapse of Lehman Brothers Holdings Inc.

China Daily-Agencies

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