The third stranded cost securitization of the year, a $320 million fixed-rate offering from Jersey Central Power & Light, is officially in the market and, as expected, the sector is well behind its pace of a year ago. While more than $7 billion of rate-reduction bonds had priced by this time last year, the sector will have priced just $1.1 billion, following the completion of JCP&L, through five months of the year.

Spreads for the JCP&L, however, are well outside of the most recent transaction from Texas-based Central P&L, with indicative levels roughly 10 basis points cheap out on the curve. Despite the finite nature of the asset class - the rallying cry for supporters of the sector - the JCP&L structure is to blame for the cheap status of these bonds.

Subscribe Now

Access to a full range of industry content, analysis and expert commentary.

30-Day Free Trial

No credit card required. Access coverage of the securitization marketplace, including breaking news updated throughout the day.