The eighth TALF round closed last week. Of the $7.9 billion of new issuance in 12 transactions, $6.5 billion was TALF-eligible.
There were $2.47 billion of loan requests for the latest round, amounting to 38% of total new issuance, slightly below the 40% YTD ratio. Auto ABS sector accounted for 68% of the new issuance. According to market reports, the spread tightening trend continued in short-term tranches where strong demand from money market funds has spreads back to pre-crisis levels.
“Two asset classes in particular were discussed,” said analysts at Societe Generale. “The return of the dealer floorplan transaction is seen as a positive development. This is due to the market - and rating agencies in particular - getting more comfort from the legal developments in U.S. carmaker bankruptcy processes and the consequences of this on dealer floorplan ABS bankruptcy remoteness.”