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Santander Pushes Plan of U.S. Car-Loan Unit Listing

Banco Santander is moving forward with its plan to list U.S. car-loan unit Santander Consumer USA Holdings Inc. on the stock market.

Santander Consumer expressed in the documents it filed last week to the Securities and Exchange Commission its intention to sell shares to the public, but with no details like its valuation, timing of the sale and how much a share will be offered.

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Someone involved in the plan disclosed that Santander Consumer is planning to sell the shares in the last quarter of the year and will seek valuation of more than $8 billion for the entire business, the Wall Street Journal (WSJ) reported.

Also according to WSJ, this year’s strong performance of U.S equity markets and the deal made with Chrysler (which made Santander Consumer the preferred lender of the automaker) recently may boost the valuation of Santander Consumer which can result in more profit for Banco Santander.

The Spanish bank was just looking at a $6 billion valuation when it was preparing the car-loan unit for listing.

Santander has been listing some of their units in other countries in their efforts to strengthen their balance sheet. For instance, it raised $4 billion last year by selling a fourth of its Mexican unit, WSJ reported.

Such deals helped the bank at the time when it had to put up with the huge loan losses in Spain.

Santander Consumer is working with several banks, including Bank of America, Citigroup and J.P. Morgan Chase & Co., on the offering.

Santander Consumer USA is one of the leading auto finance companies in the U.S., servicing more than 14,000 car dealerships nationwide. It plans to grow in the industry further by expanding its auto-loan franchise and in unsecured lending by teaming up with other consumer-loan providers.




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