Several months after emerging from bankruptcy and several years after its last ABS deal, Northwest Airlines got into the securitization game again - albeit indirectly.

The airline sold passenger ticket and cargo receivables to Finacity Corp., a specialty finance and capital markets services company, which then issued notes backed by the receivables and sold them to a single investor. The $150 million private placement garnered pricing at CP plus 100 basis points, and it represents the first time that Northwest has done a securitization in such a way, said Adrian Katz, CEO of Finacity.

Finacity arranged the transaction, whose notes have durations of five years. The company will also service the deal afterward, according to a company statement. The deal follows a period of relative stability for Northwest and the airline industry in general. Northwest recovered from bankruptcy in the second quarter, as did Delta Airlines.

"High demand growth, driven by a strong economy, finally is set to translate into a profitable year," wrote Chris van Heerden, a Wachovia Capital Markets analyst. "Firm orders for new aircraft show no sign of slowing. November saw orders for 180 aircraft."

Three new securitizations and one refinancing were completed in 2007, which put issuance in the asset class at its highest level since 2001. All of the structures were single-tranche wrapped transactions, Heerden wrote.

(c) 2007 Asset Securitization Report and SourceMedia, Inc. All Rights Reserved.

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