Ford sells Australian loan book to Macquarie
By Peter Smith in Sydney
Last updated: October 2 2009 03:00

Ford Motor, the US carmaker that underwent a debt-for-equity swap this year to bolster its balance sheet, has quit -Australia's retail car finance market after selling a A$1bn (US$874m) motor loan portfolio to Macquarie Group.

The Australian investment bank is expanding its presence in the sector as well as filling a market void left by Ford's withdrawal.

It follows the departures from Australia of GE Money, part of US conglomerate General Electric, and GMAC Finance, which is partly owned by General Motors.

Macquarie did not name the seller of the loan portfolio covering about 60,000 cars and Ford declined to comment. But a person close to the car group said Ford was the vendor. Ford continues to provide wholesale finance to Australian car dealers.

The only one of the "Detroit Three" not to receive a US government bail-out, Ford has been selling assets to cut debt.

The financial crisis has forced leading car financiers to leave Australia to focus on markets closer to home. Financiers have also sold car loan portfolios in the US and Europe due to capital constraints.

Yet credit is the lifeblood of the industry. Dealers need it to finance inventory from manufacturers, while consumers use it to buy cars.

Difficulties faced by car dealers to access funding prompted the Australian government last year to provide industry assistance via its OzCar financing scheme, designed to help dealers who had relied on financing from GMAC, GE and Ford. Macquarie has been on an acquisition spree recently and this week said it would buy Fox-Pitt Kelton, a US-based boutique bank, for A$150m, including debt.

The bank has survived the financial crisis better than many and is using its balance sheet to buy assets cheaply.

Garry Farrell, head of -corporate and asset finance, said the economic cycle had thrown up opportunities to expand leasing and finance businesses.

"Strengthening our existing businesses, in Australia and overseas, and broadening our portfolio of businesses is now the focus," he said.

Buying the Ford portfolio increases Macquarie's car finance assets under -management to about A$5bn. Macquarie, however, does not plan to enter the market for floor-plan finance to car dealers.

"Financial close occurs today," said Macquarie, adding the portfolio had been bought from a "leading Australian automotive financier".

It is also likely to have been acquired at a discount, although Macquarie declined to provide details.

The portfolio will become part of Macquarie Leasing, which is part of the corporate and asset finance unit whose assets under management will grow to about A$9.5bn.

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