Capital One Financial is poised to offer its first-ever nonprime auto deal without a wrap this week, a Capital One official said. The deal was on a roadshow, to investors last week and is scheduled to be announced formally this week, sources confirmed.
Citigroup Global Markets and Wachovia Securities are joint lead managers on the transaction, which is structured down to the triple-B level. The official could not comment on the size of the deal, but most of Capital One's auto deals total $1 billion or larger.
Capital One is no stranger to issuing prime senior/sub auto deals, with over $3.5 billion issued in the prime space since 2003, and over $11 billion in wrapped, nonprime auto deals since 2001. Of Capital One's ten wrapped deals seven were wrapped by MBIA with the remaining three wrapped by Ambac. Capital One's most recent auto deal was a $1.5 billion Ambac-wrapped transaction from its Capital One Auto Finance Trust that priced on March 30.
Capital One brings the deal amid some of the widest spreads in months in the auto sector. Spreads on one-, two- and three-year floating rate auto paper were averaging 3.5, 3.5 and 5.75 basis points over one-month Libor respectively.
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