News & Resources

Toyota sells $1 billion worth of bonds

Jan 31, 2011 Brian Bradley

On Friday, Toyota announced a $1 billion sale of bonds backed largely by auto loans. The sale, which utilizes funds from prime retail auto loans, is the next move in a recent string of auto sector bonds that have hit the market. According to a company statement, the asset-backed bond market from car makers represents the largest and most active segment of bond issuers, including 60 percent of all market bonds offered since the start of 2010. Beyond Toyota, the strong bond and auto loan market is a welcome sign for industry officials. "We expect a healthy pipeline of issuance," Jon-Claude Zucconi, a director in the securitized products origination group at Barclays Capital in New York, told The Wall Street Journal. "The floodgates have opened." Earlier in the week, Ford Credit Owner Trust announced its own bond issuance, totaling approximately $1.1 billion, mostly backed by prime retail auto loans, the Journal details. The growth of auto bonds early in 2011 continues a trend that gained momentum last year. The Wall Street Journal reports that $57.6 billion worth of bonds were sold in 2010, after $58.1 billon were sold in 2009, representing 42 percent of all asset-backed bonds sold.