Dallas-based Associates First Capital Corp. has closed the sale of 41 of its 300 branches in Canada to Citigroup's CitiFinancial Canada Inc. Of the branches involved, 28 are from Associates' takeover of rival Avco Consumer Finance Network earlier this year, and were being sold "on decisions about strengths and future opportunities" in the markets where the storefront branches were located, said Associates spokeswoman Diane Wolfenden.
Sources at Citi said although the consumer lending assets involved are not "the first choice" for its securitization efforts, the market could expect a deal from the assets, likely in the coming year and likely to be done in American markets versus Canadian.
"We're not sure of the acceptance in Canada of sliding down the consumer lending spectrum," the source said of the potential $200 million to $300 million deal. "So we may take it to the States."
Associates - with a C$3 billion ($2.1 billion) consumer lending portfolio - has a CP program in Canada, and a source close to the sale said there was no expected impact on securitization at Associates in Canada going forward. The firm's U.S. parent is readying a $1 billion credit card deal through Salomon Smith Barney, its first deal in that asset class.
Run To The Hills
Markets in Canada last week were in a slowdown leading up to this week's conference in Whistler, B.C. The Second Annual Asset Securitization Forum, organized by Toronto-based Insight Information Co., should pack the house, with 300 ABS folk planning on taking in the mountain air.
But there are some deals still pending shortly. Case Equipment may soon be in with a term deal, and there are rumors swirling about a Canadian Tire deal in the coming weeks.
And following up on the recent Merrill Lynch and Levesque Beaubien Geoffrion-led CMBS offering, similar deals are popping up. A CMBS-backed single-seller CP conduit, called Rosedale, came out from Scotia Capital Markets, with a C$230 million ($165 million) piece rated R1-high by Dominion Bond Rating Service, a C$10 million ($7 million) R1-mid piece and C$7 million ($5 million) in single-A sub notes.
Montreal's Laurentian Bank is also eyeing the structure of the Merrill deal in hopes of bringing a CMBS deal of its own to market soon. Sources have it at a simlar size to the Merrill deal, at C$250 million ($179 million). - TC