After having two deals shelved due to the events of Sept. 11, Textron Financial successfully returned to the ABS primary market with an aircraft loan and lease deal last week. The company will also go ahead with previous plans for the sale of a franchise deal sometime in the near future, according to David Wisen, head of securitization for Textron.
The Providence-R.I.-based company, which was roadshowing its offering in Manhattan at the time of the attacks, delayed the offering. Company officials, staying in downtown hotels, abandoned all belongings - except those related to the deal, which they had on person.
Even though the ABS market bounced back quickly, with most of downtown New York closed over the following six weeks this offering was understandably delayed (see ASR 10/1/01).
Luckily, Textron is a single-A credit and is considered a rather well-capitalized finance company; moreover, its aircraft collateral consists of 1,213 high-net-worth and corporate loans with no commercial airline exposure.
While spreads have widened across all sectors, the recent dip in underlying yields has Textron looking at a lower all-in rate. "From an issuer perspective the reaction is neutral," commented Wisen. "Spreads are wider but Libor rates are much lower - so from a cost-of-funding point of view, absolute yields are therefore lower."
As for the franchise loan securitization, in the preliminary stages of being shown to rating agencies during the firm's New York trip, sources confirm that it will return sometime next year via Credit Suisse First Boston. Although Wisen refused to comment on specific timing, it is not expected to hit the market in 2001.