Australian govt strike deal with banks for car dealerships
5/12/2008 16:15
The Australian Treasurer Wayne Swan announced today his government has
just struck a 2 billion-dollar (US$12.8 billion) deal with the four major banks
in the country to provide financing for car dealerships.
Car dealers have
encountered difficulties raising funds as a result of the global financial
crisis.
Swan said in a statement that two major car dealer financiers, GE
Money Motor Solutions and GMAC, are quitting the Australian market because of
the global crisis, putting more pressure on local car dealers and the automotive
industry.
The deal struck with the CEOs of ANZ, Commonwealth Bank of
Australia, the National Australia Bank and Westpac today had been designed to
support viable businesses, the treasurer said.
"Today's announcement will
help ensure the long-term viability of the automotive industry and forms part of
the government's commitment to protect jobs in this vital industry and right
across the Australian economy," the statement added.
According to swan, a
special purpose vehicle (SPV) has been established to provide liquidity to car
dealer financiers through the securitization of eligible loans. The SPV will be
implemented by Jan. 1, 2009.
The government will support the SPV by providing
a guarantee expected to cover a minor proportion of the securities issued, while
Credit Suisse is providing technical support.
Xinhua
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