Hyundai Capital America (HCA) wants to get a new $1.2 billion three-year revolving credit line and has requested proposals from several banks. Hyundai Capital America is the U.S. auto finance unit of Hyundai Motor Co. and is based in California. HCA is an indirect, majority-owned subsidiary of HMC. It offers financing to U.S. dealers and consumers to acquire Hyundai and Kia cars via dealer floor plan arrangements, retail installment contracts, and leases.
A source said that international banks were invited to offer bids for the global agreement, which will primarily be directed at lenders in North America. According to another source, four to five banks are already participating in the deal and HCA hopes for a deal to be completed by the end of 2012.
U.S. Parent HMC and subsidiary HCA have the same ratings since it will enable the raising of funds at the same competitive level. S&P has given both companies a BBB+ rating while Moody’s gave a Baa1 rating.
This was after Moody's upgraded the rating of HCA from Baa2 on November 2. Its outlook was then revised from stable to positive. U.S. subsidiary HCA came in last in the loan market for a $150 million three-year loan in December 2010. On October 25, Reuters reported that HMC’s quarterly net profit rose by 13% to $2 billion.