Ford Completes First ABS Transaction in China - Analyst Blog

Ford Automotive Finance (China), the Chinese subsidiary of Ford Motor Credit Company, a part of Ford Motor Co. F, announced that it has completed the first asset-backed securitization (ABS) in the country. This ABS will assist in financing the company's vehicle sales in the nation.

Ford Automotive Finance (China) is the first wholly foreign-owned auto finance company to complete such a transaction in China. This transaction, which is valued at 800 million renminbi, was completed under the recent ABS pilot program governed by the China Banking Regulatory Commission and the People's Bank of China.

Ford will benefit from this transaction, as it will increase the automaker's penetration in the China's capital markets, and thus help in the growth of its One Ford plan. In addition, this will support Ford's strategy of diversified financing and local funding of business.

Ford Automotive Finance (China) is now focused on increasing its dealers and retail customers in the nation. The unit will also support the launch of the Lincoln brand in China. The ABS will further support the financing requirements of Ford in the nation.

Ford Automotive Finance (China) has been in operation since 2005. It offers wholesale financing for about 400 dealers and retail financing through 500 Ford dealerships in 290 cities across China. Its parent company Ford Credit is an experienced issuer of ABS with public and private programs in the U.S., Europe, Canada, Mexico and China. It has been securitizing assets since 1989

Ford currently carries a Zacks Rank #3 (Hold). Fox Factory Holding Corp. FOXF, Tata Motors Ltd. TTM and Fuji Heavy Industries Ltd. (FUJHY) are some better-ranked automobile stocks worth considering. Fox Factory and Tata Motors carry a Zacks Rank #1 (Strong Buy), while Fuji is a Zacks Rank #2 (Buy) stock.