6-9As expected, TXU Electric completed its stranded cost ABS, albeit at levels further discounted from a widened launch. The $790 million series 2004-A transaction, led jointly by Merrill Lynch and Wachovia Securities, cleared to yield three, 12.5 and 18 basis points over swaps, respectively, or 3.528%, 4.832% and 5.34%.

For longer dated, seven and ten-year paper, spreads widened significantly from Thursday's guidance, at swaps plus three, 11 and 14 basis points. Sources close to the transaction noted that the further discounting prior to pricing reflected the issuer's desire to hold coupon levels firm, while offering juicier yields to investors.

Subscribe Now

Access to a full range of industry content, analysis and expert commentary.

30-Day Free Trial

No credit card required. Access coverage of the securitization marketplace, including breaking news updated throughout the day.