3rd UPDATE: Consumer Loan-Backed Bond Deals Back With A Boom
13 Settembre 2010 - 9:41PM
Dow Jones News
After a pause of about three weeks, the consumer loan-backed
securities market came roaring back Monday as companies announced
more than $3.5 billion of new asset-backed bonds.
The auto sector is taking the lead, as it has all year. Nissan
Motor Co.(NSANY, 7201.TO) announced a $1 billion bond, BMW AG
(BMW.XE) a $750 million deal and AmeriCredit Auto Receivables Trust
a $700 million bond.
Discover Credit Card's bond was increased in size to $600
million from an original $500 million and has priced. All Student
Loan Group has a $458.32 million student loan-backed bond,
according to people familiar with the matter. Cabela's Inc. has a
$212.5 million credit-card loan-backed bond as well.
"New deals tend to come in waves, and August has traditionally
proved to be a quieter month," said John Cho, JP Morgan Chase &
Co.'s head of ABS issuance for autos and equipment.
Through Friday, the asset-backed market had year-to-date
issuance valued at $72.29 billion, according to Citigroup. During
the same period last year, that figure was $98.69 billion.
The auto sector comprised 55.51% of total issuance so far, at
$40.13 billion. Last year, this sector comprised 40.09% of issuance
at $39.57 billion.
Activity in the credit-card sector has been markedly slow:
year-to-date issuance through Friday stood at $5.3 billion, down
from $31.3 billion at this point in 2009, according to Asset-Backed
Alert, a trade publication. That marks a decline of 83% at a time
when overall sales of asset-backed bonds are up about 1.3%. Issuers
are concerned about changes in accounting rules and other
regulations, crimping new bond sales.
"Credit card deal issuance is down in part because with new
accounting rules banks are executing credit cards deals on-balance
sheet," Cho said. "This gives banks less incentive to securitize,
given the higher funding costs associated with ABS. Also, consumers
are saving more, so the volume of credit cards loans to securitize
has decreased."
Issuance will increase only once the economy improves and
consumers have confidence to start making purchases again, Cho
said.
Still, issuance will likely remain in the $90 billion to $100
billion range this year, compared to last year's $140 billion, he
added.
Nissan Auto Owner Receivables Trust 2010-A's $1 billion prime
auto loan-backed bond was led jointly by Bank of America Merrill
Lynch, HSBC and Royal Bank of Scotland. It is scheduled to price
early this week. The bond securitizes prime-quality retail
installment auto loan contracts originated by Nissan Motor
Acceptance Corp., which has issued 29 public transactions since
1999. This is its first public retail issuance since March 2009,
according to Moody's Investors Service.
BMW's auto lease-backed bond is valued at $750 million and is
scheduled to price on Wednesday, according to a person familiar
with the matter. Joint lead managers on the bond, dubbed BMWLT
2010-1, are JP Morgan and Citigroup.
This is BMW Financial Services NA LLC's fourth publicly
registered transaction backed by auto-lease receivables since 2000,
according to a note from Moody's.
AmeriCredit has offered a $700 million bond, according to a
person familiar with the matter. Joint lead managers on the bond,
dubbed AMCAR 2010-3, scheduled to price later this week, are
Barclays Capital, UBS and Wells Fargo.
The AmeriCredit bond is a securitization of subprime-quality
retail installment auto-loan contracts originated by AmeriCredit
Financial Services, Inc. AmeriCredit has issued more than 60
subprime transactions since 1994, according to Moody's. This
transaction is its fifth overall and third senior-subordinate
retail issuance of the year.
Discover's single-tranche bond is joint led by Deutsche Bank
Securities and JP Morgan Securities. It sold at 58 basis points
over the one-month London interbank offered rate, or Libor.
All Student's bond is led by JP Morgan and is scheduled to price
later this week.
-By Anusha Shrivastava, Dow Jones Newswires; 212-416-2227;
anusha.shrivastava@dowjones.com
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