In the secondary market, Banc One Capital Markets sees value in equipment ABS, which is trading relatively wide to prime auto, and could tighten up when new issue equipment begins to hit market. According to Banc One, the months of March through May are typically the heavier months for equipment ABS.

"Two year triple-A rated equipment ABS currently offer 19 basis points over comparatively lived triple-A prime autos, and three year triple-A equipment ABS are now 27 basis outside of three year prime autos," Banc One researchers write.

The current new issue pipeline includes primarily the staple names, said a source at Moody's Investors Service. Through May 2002, nearly $4 billion of equipment ABS had closed, according to Thomson Financial.

There have been just two equipment deals this year - a $412 million intermodal asset-backed transaction from Interpool Inc., and a $233 million deal from Alter Moneta Corp. Both were first-time issuers.

Copyright 2003 Thomson Media Inc. All Rights Reserved.


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