Google Inc. is steering millions of dollars into asset-backed securities tied mostly to auto loans and consumer credit card payments, the Wall Street Journal reported Wednesday.
The Mountain View, Calif.-based company recently purchased triple A-rated debt from Honda Motor Co. and Hyundai Corp, the publication noted. Of Google’s $40 billion assets, ABS represents less than 1%.
According to the article, Google’s entry in ABS tied to auto loans and credit cards may be a sign that low rates on Treasury securities is part of a growing trend with cash-rich companies seeking out new places to park their funds.
The Wall Street Journal reported that the shift has benefited issuers of bonds backed by auto loans and credit cards. According to Thomson Reuters, through Aug. 2, $60.68 billion of bonds tied to car loans had been sold in the U.S., which is up 50% from a year earlier, the article noted.
