With the $114.5 million WRAPS series 2004-1 transaction in the market last week, Wachovia Securities became the second bank to take distressed outstanding aircraft ABS, buttress it with safer cashflows and repackage it into a new, higher-rated security. The deal, expected to price mid to late this week, is a re-securitization of the A-9 tranche of Airplanes Passthrough Trust 2001-1, which has also been repackaged by rival and original transaction underwriter Morgan Stanley.

WRAPS series 2004-1 is backed by the cashflows from an undisclosed portion of distressed ARPT bonds, combined with zero coupon IO strips, bringing the rating up to investment grade. The single-tranche Rule 144A transaction, with an 8.75-year average life, was being offered late last week with price guidance in the 145 basis point area over one-month Libor. Moody's Investors Service is expected to rate WRAPS 2004-1 A1' with Standard & Poor's assigning a A+' rating.

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