“US Bank Plans to Issue $2.5 Billion of Auto Credit-Linked Notes”
December 23, 2023
“…It’s the first time US Bank has sold this type of securitization, according to a preliminary ratings report by Moody’s Investors Service. The notes effectively allow the issuer to transfer credit risk tied to the underlying loans over to investors.
Credit-linked notes have grown in popularity recently as new capital rules set to be imposed as part of forthcoming Basel III regulations prompt banks to look for ways to optimize their balance sheets. As part of the deal, US Bank, which finances vehicle purchases across the country through a network of dealerships, is transferring the credit risk on a pool of more than 97,000 auto loans while still keeping them on its balance sheet. The debut deal is selling approximately $289 million of bonds to investors…”
https://finance.yahoo.com/news/us-bank-plans-issue-2-195744506.html