The auto sector is the only area
Yields on securities tied to auto loans and leases have narrowed to 80 basis
Strength points more than the benchmark swap rate from 95 basis points three months ago, according to Barclays Capital. Spreads on bonds tied to other consumer debt, such as credit-card and student loans, were unchanged at 73 basis points.
A rising appetite for the debt means automakers and their finance units may raise cash more easily to make loans, aiding sales of cars and trucks and potentially bolstering their creditworthiness. Global light-vehicle sales may rise to 71.1 million this year, according to J.D. Power & Associates in Troy, Michigan, surpassing the record 70.3 million units sold in 2007.
“The auto sector is the only area that has a robust new issue market,” said Joseph Astorina, a fixed-income analyst at Barclays Capital in New York. “There has been very strong appetite for new deals, and that has helped ramp up demand and tighten spreads.”
