Tesla is returning to the US asset-backed securities market for the first time in over a year, with a $1 billion prime auto-lease transaction, a sign of how credit markets are starting to recover.
The electric-vehicle maker is in the pre-marketing stage for the deal, according to a person familiar with the matter, who is not authorized to speak publicly and asked not to be identified. It marks Tesla’s first ABS transaction since securing blue-chip status in March.
The company hasn’t stepped into the US ABS market since September 2021, except for one sale that was halted in March 2022. The latest marketing comes as the asset-backed securities market, which repackages different types of debt into bonds of varying risk and size, slowly recovers from the volatility that rocked the market toward the end of last year. Spreads on new issue offerings have come in significantly since their October and November wides. And in secondary markets, bonds are being exchanged at a yield of 5.3% compared to the 5.7% highs in November, according to one measure.
