First Tennessee Capital Markets is getting ready to hit the market with its third auto ABS backed by loans originated and serviced by a federal credit union. The transaction is slated to be the largest such deal to date.
First Tennessee is hoping to price the deal sometime in late September, said D.L. Auxier, asset strategy manager for the firm. "We'll be putting the deal team together over the course of the next week to 10 days," Auxier said.
The deal is estimated to come in at somewhere between $250 and $300 million, Auxier said. First Tennessee will be acting as sole lead on the private 144A offering. As with FTN's other transactions, Standard and Poor's will likely be the only agency to rate the deal, Auxier added.
Auxier was not free to reveal the issuer on the upcoming transaction; however, he did confirm that it would be the issuer's first crack at the securitization market. The issuer is a large credit union located in the Southwest, he added, and like the previous two deals, the new offering will come off of First Tennessee's FTN Financial Auto Securitization Trust shelf, dubbed FFAST.
First Tennessee's last transaction, a $150 million fixed-rate offering backed by loans originated by Security Service Federal Credit Union, closed in February. The series 2004-A offering consists of a $142.5 million triple-A class and a $7.5 million single-A rated B class. Loans in the prime pool had a weighted average maturity of 49 months, and average seasoning of 13 months (see ASR 2/23/04).
First Tennessee also led a $50 million deal for Greylock Federal Credit Union, which priced in July 2003.
The structure of the new deal will differ from the preceding deals in that it will be an owner's trust. Both Security Service and Greylock were grantor trusts, Auxier said. "The different structure is primarily due to the larger size," noted Auxier.
The pool for the forthcoming offering will contain a mix of newer and more seasoned collateral, Auxier said: "The transaction will be a balance sheet transaction out of their portfolio; some loans will have a bit of aging, while others will be new loans."
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