The $7 billion turnaround plan for Ford Motor Co. may translate into activity for the ABS market, sources said, via Triad Financial Corp.

Triad Financial, acquired in 1999 by Ford Motor Credit, Ford's financing arm, is a sub-prime auto lender based in Huntington Beach, Calif. Market sources have detected some rumblings that the parent may move to spin out Triad in a public offering. However, before any equity offering is pursued, sources said Triad might look to crank out at least one new securitization, possibly more, to shore up its balance sheets for public investors. Triad did not return phone calls seeking comment, and Ford Motor Credit was not reached by press time.

While several analysts following Ford Motor Co. had nothing concrete to offer on the rumor, none would put a Triad spin-off out of the realm of possibilities.

"Part of the [Ford] revitalization program is to raise $1 billion from non-core assets," said one automobile analyst, noting Ford's $750 million sale of its Quick Fit subsidiary this year.

Another analyst from a bulge bracket firm stated he previously felt Ford appeared "keen" on exiting subprime lending. While he said that did not indicate, specifically, spinning out or selling Triad, he also said that Ford is deeply entrenched in its turnaround plan.

In August, Triad priced a $826.4 million ABS, "Triad Auto 2002-A" which was led by Bank of America and co-managed by Credit Suisse First Boston and Deutsche Bank Securities. That deal issued four tranches of triple-A rated notes and Triad retained $52.7 million in Class B notes.

However, a few analysts were skeptical that Triad would move to pump out new securitizations. One questioned how interested investors would be in new notes should Triad's ties to Ford be completely severed in an outright sale of the subsidiary. This would make an IPO spinout a more likely option.

While the IPO market has been especially stressed, spin-off offerings of units from strong parent companies have been a mainstay in this year's beleaguered new issues market. For example, Citigroup spun off Travelers Property Casualty Corp. in a $3.885 billion IPO earlier this year, and cigarette maker Carolina Group was spun out as a tracking stock from Lowes Corp., raising $875.7 million. Even ailing Tyco International was able to raise cash this year - spinning out frequent ABS issuer CIT Group Inc. in July, raising $4.6 billion.

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