Early in the asset-backed securities production week, issuance was so slow that one trader said he thought investors had already snatched up whatever attractive paper was on the table.
"Consumer ABS supply has been absorbed. There is nothing," he said. "It has been very difficult to keep bonds on inventory, also."
Just one deal for every major consumer ABS asset class had made an appearance by press time last week. The BMW Vehicle Lease Trust had completed a $1.2 billion deal via Barclays Capital and JPMorgan Securities. The short-term tranche did achieve single-digit spreads, at Interpolated Libor plus two basis points. Other tranches achieved mixed results and priced in the high teens to mid-20s basis-point range.
At press time, the BMW deal was the only auto ABS deal transaction that had priced, but sources said they expected another auto ABS deal, also from lead manager Barclays Capital, to hit the market by the end of the week.
Once again, an offering from the student loan ABS sector jumped in, trying to make the most of investors' flight-to-quality and bargain-hunting ways. The College Loan Corporation Trust transaction, sized at $1.5 billion, came to market with Citigroup Global Markets, Goldman Sachs & Co. and UBS Securities as lead managers. Secured by FFELP loans, all of the securities on the deal secured triple-A ratings. Information was available on just the $400 million class, although all the securities priced at par, according to information available to ASR. The $400 million piece priced at three-month Libor plus 25 basis points.
The only credit card deal on record came from the $2 billion Chase Issuance Trust Class A. The triple-A-rated, five-year notes priced at one-month Libor plus 26 basis points.
Just $4 billion was expected to come to market for the entire week, said one trader. "We're in the most difficult environment seen in 20 years. The ABX HEL index is at $200 billion this year, and we are seeing no issuance. There is virtually no economic benefit to doing an HEL issuance."
In recent issuance, the $2.6 billion CMBS deal Greenwich Capital Commercial Mortgage managed to come to market via Goldman Sachs and RBS Greenwich Capital. The five-year tranche, priced against swaps, came in at 68 basis points over, while a 10-year piece priced at 120 basis points over the same benchmark.
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