CNH Capital Corporation, the company's financial services arm, has announced a $1.1 billion asset-backed securitization (ABS) by CNH Capital Receivables Inc.

CNH Capital Corporation, the company's financial services arm, has announced a $1.1 billion asset-backed securitization (ABS) by CNH Capital Receivables Inc. The securities are backed by U.S. agricultural and construction equipment retail receivables contracts originated through the company's dealerships. CNH Capital will apply the proceeds from the securitization to repay outstanding debt.

[Note: In an asset-backed securitization (ABS) transaction, CNH pools its retail receivables contracts (i.e., the loans we make to customers who purchase our equipment) and sells them to investors, much like banks do with mortgages or auto financing companies do with car loans. CNH continues to service the loans, so the customer sees no difference. However, by securitizing our loans, we get money up front rather than having to wait for the full term of the loan, thus improving our cash flow. The proceeds are then used to both reduce our debt and provide money for new loans.]