There are few major dislocations in ABS at present. Down-in-credit trades on top-tier issuers are still a way to pick up additional yield and preserve liquidity, but good cross-sector bets remain hard to find. That said, two-year fixed rate autos are now very tight to two-year fixed rate cards. They are currently only 1 bp behind cards, so selling fixed autos and buying cards with this average life appears attractive. Also, the firm reiterates that 5-year and 7-year average life SLABS are cheap on a generic basis to credit card ABS.
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Both pools have exposures to large dealers, so losses could be more pronounced if one dealer goes bankrupt, while both series have revolving periods, when noteholders will not receive any principal.
May 3 -
The Federal Reserve, Federal Deposit Insurance Corp. and Office of the Comptroller of the Currency issued a 30-page guidebook on managing affiliate risks. The report builds on formal guidance issued last year.
May 3 -
In talks with OCC officials, "it became obvious that we would not gain near-term approval given their recent experience with multifamily and CRE positions," FirstSun CEO Neal Arnold says. The companies announced other revisions to their deal, too.
May 3 -
Subordination provides credit enhancement to the notes, as well as deposits in the reserve and redemption accounts.
May 3 -
The capital structure features initial exchangeable notes among the class A, mezzanine and B1 notes. The super senior and senior support tranches will repay noteholders on a pro-rata basis.
May 2 -
The company's branches and loan officers will transition to ML Mortgage but operations staff are not part of the deal.
May 2