This was a week of firsts as six issuers, most of which are well-established names, priced their first deals of 2012.
Five of these transactions were in the auto space. Auto deals are still the main drivers of the ABS sector, and this past week’s offerings bring year-to-date total
Year-to-date total US ABS issuance (excluding CLOs) is roughly US$25.4bn.
The overwhelming investor demand for the money-market tranches of the prime-retail auto transactions continued to increase this week, with market players reporting that the commercial-paper pieces of the Honda and Nissan deals were between seven and nine times oversubscribed.
Nissan’s money-market tranche priced at a 22bp below interpolated Libor, which is definitely a record-tight print for money-market auto ABS debt – both pre- and post-crisis.
However, these extremely low prints are mostly due to the fact that three-month Libor has widened out considerably – to about 50bp – which, even by subtracting 22bp, is still a more attractive yield than alternative money-market products, according to bankers.
As for the A3 and A4 tranches of these transactions, there is just a great deal of investor capital to deploy right now, the bankers said, and there is investor comfort in moving out on the maturity curve. The Honda A3 and A4 tranches each were four to five times oversubscribed, reflecting the increasing amount of last-cashflow interest compared to late last year.
Given that there was hardly any product in the second half of fourth quarter 2011 – and the volatility surrounding the European debt crisis – investors decided to hold onto their money and close their books. Now that things have cooled down with
Bank of
The Triple A rated classes consisted of average lives of 1.10, 2.20 and 3.06-years, and were talked at EDSF plus 10bp area, interpolated Swaps plus 22bp area and Interpolated swaps plus 30bp to 32bp.
Investor demand drove final pricing spreads tighter to 8bp, 18bp and 28bp, respectively. A money-market tranche was also priced at 19bp less than interpolated Libor after guidance was seen at minus 16bp to 17bp. The transaction was also increased from US$1.25bn.
The prior Honda transaction was the US$1.483bn HAROT 2011-3 series, which priced in mid-October 2011. The Triple A rated tranches of that transaction consisted of similar average lives and were printed at EDSF plus 9bp, interpolated Swaps plus 20bp and interpolated Swaps plus 32bp. The money-market tranche was priced at eight basis points less than Interpolated Libor.
Fellow prime issuer Nissan also tapped the market this week with the US$1.54bn Nissan Auto 2012-A series. The deal was led by JP Morgan (structuring lead), Credit Agricole and HSBC and was increased from an initial offering size of US$1bn.
The Triple A rated classes consisted of average lives of 1.10, 2.30 and 3.55-years, respectively. Price talk was seen at EDSF plus 8bp-10bp, interpolated Swaps plus 19bp area and interpolated Swaps plus 29bp area. Final pricing spreads firmed to 6bp, 15bp and 25bp, respectively. The money-market class was printed at a whopping record low (pre- and post-crisis) of 22bp less than interpolated Libor.
Ally was back in the market last week with its first dealer floorplan transaction of 2012, the US$750m Ally Master Owner Trust (AMOT) 2012-1, via the three-way lead of Barclays, Deutsche Bank and RBC. The collateral consisted of passenger vehicles as well as light and medium duty trucks (limited to 2.0% of the pool) inventory of dealers financed by Ally. The majority of AMOT is secured by new vehicles, with used vehicles representing approximately 11.0% of the portfolio. The deal is also said to have strong ageing distribution with only 3% inventory aged past 270 days.
The 2.98-year fixed and floating-rate Triple A classes were sized to demand and publicly offered. Guidance levels were seen at one-month Libor and interpolated Swaps plus 70bp-73bp. At pricing both spreads were softened to 80bp.
The Double A, Single A and Triple B rated subordinate tranches were offered as a 144a and consisted of the same weighted average lives. They were offered at interpolated Swaps plus 135bp, 180bp and 250bp. A majority of the subs were heard to be sold, according to market sources. In the September 2011 AMOT 2011-4 transaction, the three-year Triple A fixed-piece priced at 90bp and the floater at 80bp. The subs of that transaction were not offered.
Wells Fargo was sole lead on the US$150m 144a American Credit Acceptance Receivables 2012-1. The deal was backed by sub-prime auto receivables and solely rated by Standard & Poor’s.
The Single A plus tranches offered average lives of 0.35 and 1.46-years, respectively, and were initially seen at EDSF plus 165bp-175bp and EDSF plus 265bp-275bp. Final pricing was set at 155bp and 255bp, respectively. The 2.48-year Double B slice was priced at interpolated Swaps plus 675bp after being talked in the area of 700bp. The 2.33-year Single A and 2.48-year Triple B classes were pre-placed.
Wells Fargo was also sole lead on the US$150m 144a sub-prime-backed First Investors Auto Owner Trust 2012-1. The 0.19-year class was priced at 15bp over interpolated Libor while the 1.66-year Triple A tranche was printed at EDSF plus 140bp. The 3.40 and 3.93-year Double A and Single A rated slices were priced at interpolated Swaps plus 210bp and 265bp, respectively. The Triple B and Double B rated notes offered average lives of 4.12-years and were stamped at interpolated Swaps plus 475bp and 600bp.
Credit Suisse (structuring lead) and Citigroup priced the first equipment floorplan transaction of the year for GE. The GE Dealer Floorplan Master Note Trust (GEDFT) 2012-1 was increased to US$750m from US$400m and included three tranches with weighted average lives of 2.99-years. The Triple A slice was the only tranche to disclose pricing at one-month Libor plus 57bp. It was originally talked three basis points wider in the 60bp area.
The majority of the portfolio is secured by various types of equipment with power sports, marine, technology, lawn and garden, recreational vehicles, and consumer electronics and appliances, making up the majority of the portfolio, according to Fitch. The transaction comprises receivables associated with approximately 2,200 manufacturers, 24,000 dealers, and 13 separate product lines.
Adam Tempkin and Charles Williams
thanks for the article
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