The August pipeline remained quiet, but market sources said that there is some indication that investors are looking to put money to work.
The problem is that, at the current spreads, it is unlikely that issuers will be tempted to veer away from the now-routine securitization and repo format that has accounted for over 90% of the issuance seen so far this year.
Nonetheless, the market continued to see a sprinkle of deals. Last week details emerged on Volkswagen Bank's Ä967 million ($1.4 billion) true sale securitization of German auto receivables, dubbed Driver Six GmbH. It's the eighth term deal issued by the bank, and it mirrors exactly the structure applied in the driver transactions, with a static portfolio starting to amortize immediately after the closing date.
The transaction is made up of Ä936 million two-year triple-A rated class A notes and Ä31 million 2.4-year single-A plus rated class B notes. The collateral comprises 81,510 auto receivables split between amortizing and balloon loans. The transaction is expected to price in the end of September. BNP Paribas is lead manager on the deal.
Also marketing last week was a Ä200 million lease securitization program for EuroLease Auto, a subsidiary of the Bulgarian leasing group Eurohold Bulgaria.
The deal, EuroLease Auto Finance EOOD, will be structured into a triple-B plus-rated senior note and a double-B plus-rated mezzanine loan. Deutsche Bank is lead manager on the transaction and EuroFinance, a member of the Eurohold Bulgaria group, has been named co-manager.
EuroLease is aiming to generate a leasing portfolio of 1.0 billion Bulgarian levas ($74 million) and to become a regional player in the leasing market for automobiles and small-load vehicles, according to market reports.
EuroLease Auto intends to replicate the structure of this initial deal in order to secure long-term financing for its other markets of operation, such as Romania and Macedonia, as well as Serbia and Russia, where the company has plans to commence commercial operations.
Securitization will provide the company the opportunity to become more price-competitive, increase its net interest margins, and strengthen sustainably its market position.
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