HALISTER1: Ford, GM Debt Maturities Face ‘Wild Card’ in Auto Residuals: BI

Ford, GM Debt Maturities Face ‘Wild Card’ in Auto Residuals: BI

(Bloomberg) -- Auto manufacturers still have $21b of U.S.-dollar debt maturities coming in 2017 at a time when industry players are expecting residual values on used cars to decline, Bloomberg Intelligence analyst Joel Levington says in a report.
  • Lower residual values translate into less value for the assets backing loans and bonds issued by auto manufacturers and rental- car companies, which may weigh on refinancing deals
  • “These balance-sheet exposures may remain a wild card given softening demand, high levels of inventory and intense pricing pressure.”
  • Ford, Honda and Toyota account for 55% of IG auto manufacturer maturities
  • NOTE: GM sees used-car prices falling 7% this year, lender Ally Financial said that prices fell that much in 1Q
  • NOTE: Manheim’s monthly report on wholesale used-vehicle values for May showed overall gain of 2.6% from a year earlier, but mid-size sedan prices fell 2.4%
To contact the reporter on this story: Molly Smith in New York at msmith604@bloomberg.net To contact the editors responsible for this story: Nikolaj Gammeltoft at ngammeltoft@bloomberg.net Rick Green, Kenneth Pringle

Alert: HALISTER1
Source: BFW (Bloomberg First Word)

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F US (Ford Motor Co)
GM US (General Motors Co)
ALLY US (Ally Financial Inc)
CAR US (Avis Budget Group Inc)
HTZ US (Hertz Global Holdings Inc)

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BFW Debt Capital Markets U.S.

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