|
|
|
GMAC hopes to keep the same funding mix - 30% institutional debt, 18% retail and 52% securitization.
|
If there's one woman in the debt markets that bankers have to keep sweet, it's Cynthia Ranzilla, vice-president of US funding and global markets at GMAC.
She is responsible for dishing out mandates to banks in every asset class and market where GMAC funds its $275 billion asset base and it's something she takes very seriously. "It's a continuing challenge to manage the relationships so that meaningful business can be provided to the banks while awarding that business based on each firm's attributes," she says.
Firm but fair with bankers
Despite having the power radically to affect the success of debt capital markets teams worldwide, and in all likelihood the size of their bonuses, Ranzilla is seen as a firm but fair person to deal with. "You are diplomatically but clearly told where you are in the list, what you will be doing and how you will be commensurately rewarded," says one banker. "And you believe that there's an eternal scorecard held at GMAC somewhere where you can collect points."
There are not many debt markets, currencies or products that GMAC hasn't tapped, but when Euromoney met Ranzilla at the end of last month in GMAC's Fifth Avenue office, she was excited about that day's launch of something quite new – GMAC and GMAC International's inaugural offering of European SmartNotes, a continuously offered programme to be distributed through retail brokers and sold at par to retail investors.
GMAC has been successfully tapping the public retail market in Europe for several years, but SmartNotes is a tried and tested strategy in the US. Since GMAC launched its first US SmartNotes programme in 1996, it has raised $29 billion in this product alone.
The launch offer is in three years and five years in euros but Ranzilla says SmartNotes will eventually come to the sterling retail investor base too. The product will be offered in Germany, the Netherlands, Switzerland and the UK initially, but Ranzilla says coverage could well expand. "The challenge now is to build the retail distribution," she says.
Last year's funding was dominated by the jumbo $17 billion bond in which GMAC and its parent issued tranches. Ranzilla says: "We've had strong growth over the last few years driven by high automotive sales and increased use of incentives programmes. Based on current predictions, this year's funding activity is likely to look similar to last year's, excluding the event financing with GM."
GMAC is also hoping to keep roughly the same funding mix, doing about 30% institutional debt, 18% retail and 52% securitization. The defining move of the past few years has been an increasing commitment to the ABS markets, as its rating has deteriorated – to the whole loan market, ABS, bank conduit ABS and lease securitizations.
Ranzilla is seeking new opportunities. "We're stepping up securitization funding at international subsidiaries, which to date has been an untapped funding source." GMAC has not done this before because of the high cost of setting up new ABS programmes, but she says the spread differential now when funding in the ABS market makes it worth it. "We've executed two transactions in Australia, one for New Zealand and two for Europe so far."
No need for benchmarks
GMAC did a $1.1 billion MTN issue in January but so far the market has yet to see an institutional benchmark from GMAC, despite the strong rally in auto corporate spreads. But Ranzilla doesn't see the need for many benchmark issues this year, particularly given that GMAC did $8 billion of pre-funding of 2004 term debt last year and is carrying a heavy cash position.
She is also looking for opportunities for retail notes in Japan and in other Asian currencies. "We hope to have the opportunity to be in the samurai market again. Last December, we executed our first retail-focused samurai in many years and we hope it is a positive sign for the market."