Last week Elderslie Finance Corp., an Australian finance and investment company specializing in equipment and operating leases, launched a third issue from its Elderslie Master Trust facility.

National Australia Bank arranged the A$83.8 million ($62.3 million) issue, reprising its role on Elderslie's two previous ABS deals.

The latest six-year offering is backed by 5209 operating and finance leases, hire purchase contracts and consumer rental contracts, with a combined outstanding principal of A$73 million and average seasoning of 12.5 months.

Standard & Poor's has assigned triple-A ratings to the A$72.9 million senior tranche, while the A$5 million B-class and A$3.5 million C-class notes are rated A' and BBB' respectively.

At closing, Elderslie will simultaneously redeem outstanding bonds on its 2005 outing. The A$47 million deal, completed last May, saw spreads of 21 basis points over the bank bills swap rate (BBSW) on the triple-A piece; and 40 and 65 points for the single-A and triple-B rated bonds.

With domestic investors showing strong regard for asset-backed deals as a diversification play, Elderslie should achieve pricing a few basis points inside its second securitization.

A more relevant benchmark was provided by CNH Capital in April with the completion of a A$420 million agricultural lease-backed deal arranged by Societe Generale.

Even at a record low of 17 basis points over BBSW, the 1.6-year triple-A piece was 3.8 times oversubscribed, while the triple-B subordinated notes were 2.1 times covered at a 52 point spread over 2.7 years.

(c) 2006 Asset Securitization Report and SourceMedia, Inc. All Rights Reserved.

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