Looking back 10 years... While some things have changed drastically, many others have remained the same. Reading a story printed in the June 22, 1992 issue of the Asset Sales Report (the predecessor of ASR) shows that even then the auto loan and credit card sectors had the most demand, with top-tier names achieving record-tight levels.
Many of the names (Citibank) remain the same. Others, Shawmut Bank and Advanta for example, have either greatly reduced funding in the ABS market or disappeared in a wave of consolidation. Additionally the underlying benchmark of the time Treasuries, has since been replaced with swaps, making spread comparisons confusing.
ABS Spreads Keep Holding Despite Increased Issuance
Despite an increase in new issues prior to the end of the second quarter, spreads in the asset-backed market remained steady and relatively tight, according to industry sources.
While pricing its $1.596 billion deal this month, Citibank achieved record tight spreads on a deal of that size, hitting 46.7 points over Treasurys on it's A piece; it also broke another record with its B securities, which will yield 70 points over Treasuries.
GMAC priced shortly afterward, hitting a spread of about 43 points. Shawmut's auto loan-backed issue priced last week at a fairly tight spread of 49.5 basis points.
Last week, Advanta's home equity loan issue contained one tranche valued at 126 over Treasuries, while another priced at 57 points over the London Interbank Offered Rate, also within recent range against Libor.