By Dow Jones Business News,
January 23, 2014, 10:55:00 AM EDT
Santander Consumer USA Holdings Inc.'s stock rose in its trading debut, after the auto lender's initial public
offering raised more cash than initially forecast.
The Dallas company's shares opened at $25.75 on the New York Stock Exchange Thursday, up 7.3% from the $24-a-share
price for its IPO.
Late Wednesday, Santander Consumer insiders agreed to sell about 75 million shares for $24 each, raising $1.8 billion
before the potential sale of additional shares to underwriters. Earlier in the day, the company had raised projections
for the number and price of shares to be sold in its debut, signs of strong investor demand for the shares.
The IPO marks investor confidence that U.S. consumers' personal finances are improving. Santander Consumer originates
new and used car loans, many of them to so-called subprime borrowers, or those with credit scores under 650. Subprime
loans can offer higher margins but also carry a greater risk of delinquencies, particularly in the event of an economic
slowdown or downturn.
The company holds some of that debt on its books and packages some of it into asset-backed securities for sale to
Sellers in the IPO included an investment vehicle led by private-equity firms Centerbridge Partners LP, KKR & Co. and
Warburg Pincus LLC. Santander Consumer itself didn't sell any shares in the offering.
Wednesday, the company raised its forecast for the size of the IPO, projecting the sale of 75 million shares for $24
to $25 apiece, up from earlier estimates for 65.2 million shares fetching $22 to $24 each.
Santander Consumer, a unit of Spain's Banco Santander SA, listed on the New York Stock Exchange under the symbol SC.
Citigroup Inc. led the offering with J.P. Morgan Chase & Co.
Write to Matt Jarzemsky at firstname.lastname@example.org
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
Copyright (c) 2014 Dow Jones & Company, Inc.