May 22, 2018
When repaying debt, mobile phones come before cars
NEW YORK—U.S. consumers are more devoted to their mobile phones than their automobiles.
The sea change has taken place over the last few years as mobile devices become an integral tool not just for communication with loved ones or employers, but also everything from banking to dating to watching TV and listening to music. As cars grow relatively less important, borrowers struggling to pay back their loans on time are increasingly prioritizing payments on the latest iPhone instead of making sure they hold on to their pickup or coupe.
The shift is increasing the attractiveness of bonds generated from mobile-phone loans, a small but growing portion of the asset-backed securities (ABS) market. While just $7.7 billion (U.S.) of bonds backed by phone purchases have been issued since 2016 — and all by Verizon Communications Inc. — the number may increase over coming years.