Continuing its pattern of quarterly issuance into 2000, auto lender Union Acceptance Corp. will be coming out to market sometime soon, with price guidance already available, according to published reports.
The company announced a $282.7 million offering backed by auto loans. The five-part deal will have average lives ranging from 0.14 years to 3.81 years, and will feature a financial guaranty by MBIA Insurance Corp.
"We've securitized every quarter for the last several years, our plans are really no different this year," stated the source.
"The only consideration would be two quarters ago we closed on a commercial paper facility, a kind of conduit. This allows us to sell the receivables into the conduit rather than securitize. We have not used that yet. It's an option we want to have available in case the spreads in the asset-backed market really get out of hand," the source added.
Indianapolis-based Union Acceptance Funding Corp., a division of UAC, renewed its credit facility with Banc of America Securities in September. This raised its borrowing potential to $500 million through its conduit, Enterprise Funding Corp.
In terms of deal volume, the company usually securitizes three months worth of origination. "When we securitize this February, we'll be securitizing November's, December's and January's business," said the source.
"The volume from the quarter we just reported is what will be, for the most part, securitized this coming quarter. We securitize based on what we originate the quarter before, give or take a month because we normally securitize the middle month of the quarter," the source noted.
UAC recently announced results for the second quarter ended Dec. 31. The company's net earnings for the quarter totaled $2.1 million as compared to net earnings of $2.9 million for the quarter ended Dec. 31, 1998.
The company last came to market in November with a five-part $302.6 million offering that featured a financial guaranty from MBIA. The average lives ranged from 0.27 years to 3.82 years. Banc of America Securities was lead manager.