Following last week's news that ANC Rental opened the bidding for its operations, one of the more innovative securitizations ever will likely enter early amortization. But with a strong need for financing in order to maintain the rental operations, whatever entity does emerge from bankruptcy will have to access the ABS market, sources said, something that may meet resistance if investors feel burned by how the situation is handled.

Last week, the company received bankruptcy court approval to sell its operations, after having filed shortly after the Sept. 11 terrorist attacks. The initial bidder Cerberus Capital Management, the New York-based private equity fund that is now in the role of the stalking horse, is no stranger to ABS holders, as it was involved in the purchase of Conseco' Finance by CFN Investment Holdings. The ARG Funding 2002-2 deal can be kept alive by the eventual winning bidder, albeit at what was described as a "prohibitive cost." As part of its court-approved agreement, should Cerberus be outbid, it would claim $11 million in severance for its troubles.

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