Despite continued volatility in the form of shaky swaps, Treasury yields and rising interest rates, 2Q00 was the asset-backed market's most active second quarter to date, according to figures provided by Thomson Financial Securities Data.
Most of the $57.4 billion in public volume happened in June, when issuance hit $26.3 billion. Of that number, $9.3 billion represented a surge from the auto sector.
Though autos had a good month, a continuing decline in the home equity sector has depressed expected volume levels for the year. At the end of the second quarter, there was approximately $109 billion in U.S. public new issuance, $5 billion over 1999's half-year mark.
For residential ABS, through June 1999, home equity and manufactured housing issuance was $38 billion and $7 billion respectively in the public market, compared to this year's $35 billion and $5 billion respectively.
Most other sectors, however, showed a pick up in issuance compared to the 1999 numbers. Again, the auto-backed sector has had an impressive run, with $27 billion in issuance, nearly $6 billion more than the half mark last year.
The equipment lease and dealer floorplan sectors showed $4.3 billion and $3.1 billion respectively. Through June of last year, equipment lease-backed deals accounted for $3.4 billion in public issuance. There were no dealer floorplan deals in the first half of 1999.
In an astounding leap up from its No. 31 spot in mid-year 1999, SLM Holding Corp., otherwise known as Sallie Mae, has topped the issuer charts in year-to-date totals through 2Q00.
Sallie Mae issued $6.7 billion in student loan-backed ABS through June, accounting for about 63% of the $10.6 billion in issuance from the entire sector.
Though Sallie Mae's lead is largely due to its whopping $4.1 billion in 1Q00 issuance, the issuer still pulled in an impressive fourth place for 2Q00 alone, with nearly $2.6 billion in proceeds.
"The way our deals have gone so far this year, we've had strong investor inquiry," said Guido van der Ven, assistant vice president at the company. "We are the largest originator and purchaser of student loans, so we have a substantial portfolio that needs to be funded and securitization is an important source of funding for us."
While Sallie Mae was No. 1 in year-to-date issuance, GMAC-Residential Funding Corp. topped the chart for quarterly issuance. The company issued $4 billion in asset-backed deals, dominating 7% of the market. Most recently, the company completed a $600 million high-loan-to-value (HLTV) home-equity securitization, the largest HLTV transaction in the company's history.
"With the continued upheaval - firms going out of business, firms closing their doors and bankruptcy - I think people are looking for a very strong consistent player in those marketplaces to align with," said Eric Scholtz, managing director of capital markets with the company. "We've always been a firm that has really promoted developing longer-term relationships with clients."