Trafigura Securitization Finance's (TSF) series 2012-1 is in the market. The offering is backed by a pool of trade receivables originated by Trafigura Beheer B.V., Trafigura Pte. (Singapore), and Trafigura AG, according to Standard & Poor's.
This will be Trafigura's second trade-receivables-backed medium-term note issuance. S&P has assigned preliminary ratings of 'AAA (sf)' to the Class A worth $232.5 million and 'BBB (sf)' to the Class B worth $17.5 million.
Moody's Investors Service has also assigned a provisional rating of 'Aaa' to Class A notes and a rating of 'Baa2' to the Class B notes. Moody's is not rating the senior and junior subordinated loans.
The securitized trade receivables are generated from the sale of oil products, metal concentrates, iron ore and coal, Moody's reported.
According to S&P, the preliminary ratings reflect its assessment of the global economic conditions. The rating agency's forecast for the global economy is that of a recovery with growth from Asia and the U.S., which comprise a third of TSF's portfolio.
The remaining two thirds are divided between the U.K. and the rest of Europe, where S&P's prediction is for a recession or flat growth. The U.K. should be able to go through any downturn relatively better than Europe by using its own currency and having strong trade links with Asia and the U.S., S&P said.
The rating agency said that the receivables' underlying obligors tend to be highly rated firms with short payment terms. This should results in the portfolio having low credit risk. To date, S&P reported that there have been negligible defaults, delinquencies, and dilutions.
The deal utilizes dynamic credit enhancement (CE). This means that CE levels will adjust to be in line with the portfolio's credit quality. The dynamic CE in the deal is from the subordinated loan, with the class A notes having a floor of 15% CE and the class B notes having a floor of 9% CE.
Other deals in the market include the $250 million American Home Mortgage servicer fee transaction and the $256.4 million SLABS from Missouri Higher Education Loan Authority, according to Bloomberg. Yesterday J.D. Byrider priced its $145 million subprime auto ABS.