Merrill moves into securitized car loans - Money Matters

Merrill Lynch Financial Assets has begun offering investors the ability to invest in securitized car loans.

Similar to mortgage-backed securities, which securitize commercial real estate, Merrill is packaging car loans and selling them as fixed income investments. The loans are securitized by AmeriCredit Canada, which has been originating car loans in Canada since 1998. Out of these loans, Merrill will offer five securities with ratings ranging from AAA to BBB. Investors are also offered a floating rate certificate with a term of less than one year to maturity. The interest rate on the securities is set above the rate on three-month bankers' acceptance. Presently, AmeriCredit will do two securitizations a year.

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"Merrill moves into securitized car loans - Money Matters". Money Digest. June 2002. FindArticles.com. 16 Jun. 2008. http://findarticles.com/p/articles/mi_m0JQR/is_6_17/ai_87456926