Yamaha Motor Finance Corp. plans to jump back into the ABS market after an 18-year hiatus, using its branded credit cards as the underlying assets, according to a report from ABAlert.com.
Yamaha would be the third powersports lender to securitize in recent years, behind Harley-Davidson Financial Services and ThunderRoad Financial. When asked for comment, Yamaha Motor Finance neither confirmed nor denied the report.
“Yamaha Financial Services is always open to liquidity options and different alternatives to support the growth of our portfolio,” Kevin McConahey, group manager of financial planning & analysis told Powersports Finance. “Securitization is an option we have investigated in the past and will continue to review in the future.”
It’s been 18 years since Yamaha last issued an asset-backed security. From 1994 until 2000, the company had completed four transactions totaling $684 million — two backed by motorcycle loans and two that funded an earlier floorplan program, according to Asset-Backed Alert’s ABS Database. Yamaha plans to launch a new floorplan program by yearend, Powersports Finance has previously reported.
“We are always looking at ways to diversify and lower our overall funding costs,” McConahey said. “With rates on the move, we continue to evaluate our [securitization] options.”
Yamaha launched its credit card program with a Capital One Financial Corp. co-branded card in November 2016, then partnered with WebBank on an in-house card when Capital One exited the market, Jeff Young, president of Yamaha Motor Finance, previously told PSF. What this means is that in coordination with WebBank, Yamaha Financial Services manages all marketing and servicing activities associated with the program and that WebBank funds all of the extensions of credit made with the Yamaha Card. After an initial holding period, WebBank sells the receivables to Yamaha, Lyndon Elam, vice president of retail sales, marketing and operations told PSF.
Yamaha holds about 10% of the global motorcycle market. The motorcycle segment accounted for two-thirds of Yamaha’s revenue and more than 40% of its operating profits for the year ended Sept. 30, 2017, according to a December 2017 report from Moody’s.