Banks to provide car liquidity
(8 December 2008 – Australia) The Federal Government has announced that a Special Purpose Vehicle (SPV) will be established and backed by Australia’s big banks to provide liquidity to struggling car dealer financiers.
This announcement follows a meeting with the Chief Executive Officers of ANZ, CBA, NAB and Westpac. These leading banks will all support the vehicle.
An agreement was reached to provide critical liquidity support to car dealerships that have up until now been financed by GE Money Motor Solutions and GMAC.
The two major car dealer financiers have both recently decided to exit the Australian dealer financing market, leaving car dealer financiers in financing difficulties in the current global financial crisis.
The SPV, which will be established as a financing trust, is a private sector solution which will provide liquidity to car dealer financiers through the securitisation of eligible loans provided to car dealers.
The SPV will be implemented by 1 January 2009 and the overall size of the SPV will need to be around A$2 billion.
Credit Suisse is providing the necessary technical support to develop the SPV. The Government will provide support to the SPV in the form of a guarantee expected to cover a minor proportion of the securities issued.
The SPV will be available to both new vehicle and mixed vehicle dealerships that trade cars, trucks, motorbikes, boats, caravans and other commercial vehicles as long as they are currently financed by GE Money Motor Solutions or GMAC.
An agreement was reached to provide critical liquidity support to car dealerships that have up until now been financed by GE Money Motor Solutions and GMAC.
The two major car dealer financiers have both recently decided to exit the Australian dealer financing market, leaving car dealer financiers in financing difficulties in the current global financial crisis.
The SPV, which will be established as a financing trust, is a private sector solution which will provide liquidity to car dealer financiers through the securitisation of eligible loans provided to car dealers.
The SPV will be implemented by 1 January 2009 and the overall size of the SPV will need to be around A$2 billion.
Credit Suisse is providing the necessary technical support to develop the SPV. The Government will provide support to the SPV in the form of a guarantee expected to cover a minor proportion of the securities issued.
The SPV will be available to both new vehicle and mixed vehicle dealerships that trade cars, trucks, motorbikes, boats, caravans and other commercial vehicles as long as they are currently financed by GE Money Motor Solutions or GMAC.
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