2nd UPDATE:Volkswagen Offers $1 Billion TALF-Eligible Deal
30 Aprile 2009 - 7:41PM
Dow Jones News
A little over $3 billion in asset-backed securities deals have
emerged ahead of the loan application deadline for a Federal
Reserve program supporting this market.
Two of the deals are in the auto sector and a third is backed by
equipment loans. Market participants are expecting more deals
before the May 5 deadline to access nonrecourse loans under the
Term Asset-Backed Securities Loan Facility, or TALF.
Motorcycle company Harley Davidson Inc. (HOG) is roadshowing a
$500 million deal that is also eligiblefor funding under TALF. Lead
managers are JPMorgan Chase, Citigroup, Deutsche Bank and RBS. The
deal is called Harley-Davidson Motorcycle Trust 2009-1 and is
backed by motorcycle contracts.
Volkswagen AG (VLKAY) is in the market with a $1 billion deal,
called VWALT-09, which is scheduled to be sold May 5. Joint leads
are JPMorgan and Bank of America Corp.
Honda Motor Co. (HMC) and CNH Global NV (CNH) are also shopping
TALF-eligible deals.
Honda's $1.25-billion asset-backed securities deal, dubbed HAROT
09-2, is backed by auto loans and is also expected to be sold on
May 5.
On the largest triple-A-rated tranche of $456 million, guidance
is in the range of 150 basis points to 155 basis points over a
short-term futures benchmark.
The deal is led jointly by JPMorgan and BNP Paribas SA.
In January, Honda sold a $1.3 billion deal, called HAROT 2009-1,
which wasn't eligible for funding under the Fed's program. That
deal, led by Barclays, was the first auto asset-backed securities
deal of the year.
Investors can apply for the third time for non-recourse loans
through the central bank's program. These loans can be used to
purchase newly created bonds backed by auto, student, credit-card,
small business, equipment and floorplan loans as well as
residential mortgage servicing advances.
About $12 billion in new bonds backed mainly by auto and
credit-card loans that investors could buy using TALF have
sold.
Risk premiums on these and other consumer loan bonds have
tightened since the program's launch in March. This will eventually
lower the cost of borrowing for consumers taking on new loans.
Price guidance on CNH's $760.81 million equipment loan-backed
deal is out. On the largest triple-A-rated tranche worth $281
million, it is in the 180 basis points over a short-term futures
benchmark area.
Barclays Capital and Credit Suisse are joint leads on that deal,
dubbed CNH Equipment Trust 2009-B. Banc of America Securities, BNP
Paribas and Royal Bank of Scotland Group PLC are co-managers.
Financial-services company USAA, which sold a $1.125 billion
deal that wasn't eligible for TALF, has said it will tap this
market again.
Ford Motor Co. (F) has also said it plans to access the TALF
program again. Ford Motor Credit, the finance arm of Ford, sold a
$2.954-billion deal backed by auto receivables in March. It was one
of the first asset-backed deals eligible under TALF to be sold.
Non-TALF issuance stands at about $9 billion so far this
year.
-By Anusha Shrivastava, Dow Jones Newswires; 201-938-2371;
anusha.shrivastava@dowjones.com