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Turners to sell $150m stake in loan book

NZN 25/01/2017 Edwin Mitson

Turners, the country's largest seller of vehicles, is to sell stakes in its loan book in a deal worth an initial $150 million.

As well as selling cars and trucks and lending people money to buy them, Turners owns Dorchester Finance, Oxford Finance and Southern Finance, which loan money to individuals and businesses.

The process is known as securitisation and sees the loan originator pool the value of the loans to create a fund.

Investors buy stakes or tranches in the fund, and are entitled to the income from the loans as the money is repaid by the debtor.

In a statement to the NZX, Turners said the securitisation programme had been arranged by Bank of New Zealand, and covered loans made by Dorchester Finance, Oxford Finance and Southern Finance, as well as the recently established MTF (Motor Trade Finance) Partnership channel.

Todd Hunter, chief executive of Turners, said securitisation had been a core funding strategy for the business for some time and they were pleased to receive credit approval for the programme.

The securitisation programme is to start in February, with the first sales due to occur in March.

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