First Tennessee Capital Markets is shopping the second-ever auto ABS backed by loans originated and serviced by a federal credit union, sources confirmed. The deal, which pools loans from Security Service Federal Credit Union, is coming off of First Tennessee's FTN Financial Auto Securitization Trust shelf, dubbed FFAST for short.

The $150 million two-tranche series 2004-A offering consists of a $142.5 million triple-A class and a $7.5 million single-A rated B class. The entire transaction, which is fixed-rate and with average lives of 1.35 years, will price with a spread over EDSF. Pricing is expected this week. The deal has been in the market for two weeks, but has been held up over credit enhancement levels as well as First Tennessee's annual fixed-income conference, held at its headquarters in Memphis the week before last. Standard & Poor's is the only agency rating the deal. Investors have soft-circled yields on the private negotiated transaction and pricing is seen shortly, according to sources familiar with the offering.

Loans in the prime pool have a weighted average maturity of 49 months, and average seasoning of 13 months. There is no information regarding geographic distribution. Settlement is scheduled for Feb. 26. Founded in 1946 to serve members of the U.S. Air Force Security Service, Security Service offers credit to more then 600 businesses. With assets totaling $2.9 billion, Security Service also offers credit card, mortgage and consumer loans for members. Security Service is a non-profit, member-owned entity, with a volunteer board of directors. The only other federal credit union-related auto ABS, a $50 million 2003 transaction for Greylock Federal Credit Union, also priced off the FFAST shelf via First Tennessee.

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