More Than $12 Billion In Consumer-Loan-Backed TALF Deals To Price
01 Settembre 2009 - 11:33PM
Dow Jones News
More than $12 billion in newly created consumer-loan-backed
bonds are scheduled to price ahead of a Federal Reserve program
deadline on Thursday.
These securities, backed mainly by credit card and auto loans,
surfaced ahead of the seventh loan application deadline for
consumer-loan-backed portion of the central bank's Term
Asset-Backed Securities Loan Facility, or TALF.
The program, launched in March, is credited with boosting the
securitization market and helping ease the flow of credit in the
economy.
Through the TALF, investors can procure cheap loans to buy new
consumer-loan-backed and new and existing
commercial-mortgage-backed bonds. TALF was set to expire Dec. 31,
but earlier this month the central bank and the Treasury Department
extended their support, citing "impaired" conditions in financial
markets.
TALF loans against newly issued asset-backed securities and
existing commercial-mortgage-backed securities will be extended
through March 31, 2010. For newly issued CMBS, which take a
significant amount of time to put together, the extension is until
June 30, 2010.
The next loan application deadline for the ABS portion of the
program is Thursday. For CMBS, the deadline is Sept. 17.
On Tuesday, Nissan Motor Co. Ltd. (NSANY) sold its $1.025
billion deal. Dubbed NALT 2009-B, it is backed by auto loans. Its
largest triple-A rated tranche worth $423 million and with a
duration of 1.74 years, sold at 95 basis points over a short-term
futures benchmark.
Citigroup's (C) deal, also eligible for the Fed's TALF program,
has price guidance. The credit-card loan-backed deal has two parts.
The three-year portion is $750 million, while the five-year portion
is $1.5 billion, according to a term sheet.
On the three-year tranche, guidance is in the area of 155 basis
points over one-month London interbank offered rate for the
floating-rate portion. It is in the area of 155 basis points over
mid-swaps for the fixed rate portion.
On the five-year tranche, guidance is in the 275 basis points
area over one-month Libor for the floating-rate portion and 275
basis points over mid-swaps for the fixed-rate portion.
The final mix of floating- and fixed-rate portions has yet to be
determined.
Earlier Tuesday, price guidance was announced for a $941 million
auto-loan-backed deal offered by GMAC Inc.'s Ally Bank. The bond is
scheduled to price Wednesday.
Price guidance on its largest triple-A portion worth $320
million with a duration of 1.17 years is in the 75 basis points
over a short-term futures benchmark area. The deal is dubbed Ally
Auto Receivables Trust, or AART 2009-A. Joint leads on the deal are
Citigroup, Deutsche Bank and RBS.
On Monday, Discover Financial Services' (DFS) $1.3 billion
credit-card-loan-backed deal priced, according to a term sheet. The
deal, dubbed DCENT 2009-A2, was increased in size from an original
$1 billion. It sold at 130 basis points over one-month Libor. In
July, Discover sold a $1.5 billion credit-card loan-backed deal at
130 basis points over one-month Libor.
American Express Co. (AXP) sold its $1.25 billion TALF eligible
deal, according to people familiar with the matter. The credit card
loan-backed deal sold at 125 basis points over one-month Libor. The
deal was increased in size from an original $1 billion. Joint leads
on the current deal were Barclays Capital, JPMorgan and RBS.
Amex had sold a $1 billion credit card loan-backed deal in June
at 135 basis points over one-month Libor.
Other deals include a $1.995 billion auto loan-backed deal from
Bank of America (BAC). Price guidance on its largest triple-A-rated
tranche worth $736 million is in the area of 100 to 110 basis
points over a futures benchmark.
Ford Motor Co. (F) has a $2.074 billion auto-loan-backed deal.
Its largest triple-A-rated tranche is $805 million and the price
guidance on it is in the area of 120 basis points to 125 basis
points over a short-term futures benchmark.
-By Anusha Shrivastava, Dow Jones Newswires; 212-416-2227;
anusha.shrivastava@dowjones.com