Ally Bank’s upsized $1 billion dealer floorplan ABS priced on Tuesday wide of levels seen in the recent Ford Credit Floorplan Master Owner Trust deal.
Ally’s deal, Series 2013-1, class A notes were issued in two tranches. The 2.98-year, class A-1 floating rate asset backed notes and the 2.98-year, class A-2 fixed rate notes priced at 45 basis points.
Ford’s $1.7 billion deal, which along with Ally drove the majority of public floorplan ABS issuance over 2012, priced its 2.98-year, triple-A notes at 38 basis points.
Credit Suisse, JP Morgan and RBC Capital Markets were lead underwriters on the Ally deal, according to deal prospectus file with the U.S. Securities and Exchange Commission. BNY Mellon Capital Markets,Credit Agricole, Lloyds Securities, PNC Capital Markets and Scotiabank were co-managers on the deal.
Dealer floorplan ABS issuance is expected to exceed $10 billion this year, according to Standard & Poor’s. Issuance volumes in the sector have been boosted by strong auto sales and the refinancing of maturing transactions.
Moody’s Investors Service in Jan. 24 report, attributed the low cost of ABS fund relative to on balance-sheet funding as another factor that helped issuance volumes grow. During 2012 public floorplan ABS totaled $14 billion from 17 deals. In 2011 and 2010 the total for the sector was $7.1 billion and $7.7 billion from ten transactions, respectively.
Ally had originally sized its initial deal of 2013 at $500 million, the uptick in size shows that demand is still strong for this paper, despite the softer spreads seen on the triple-A’s.
Earlier this year the market also saw Navistar’s $200 million deal, which issued a triple-B rated tranche for the first time. Navistar priced its 1.95-year, triple-A notes at 67 basis points; 1.95-year, double-A notes at 100 basis points; 1.95-year, single-A notes at 150 basis points and its 1.95-year, triple-B notes at 225 basis points.