Almost $7 billion in bonds supported by assets including auto-loan payments were marketed earlier this week. Auto deals are the mainstay of the market which attracted the most interest among investors. The demand was in fact so strong that Ford was able to fast-track its $1.342 billion in auto-loan deal, basically ordering investors the range at which the deal was predicted to be priced.

Once a tranche becomes a one-time subscription, Ford offers what is called “subject” precautions which basically means that it is ready to be priced. About 90 % investor orders took a big part in the deal that were consistent with the company’s prior transactions this year. According to a market participant, who having knowledge of the said deal could have been priced slightly tighter which could tap the market more frequently in order for things to be done much faster.

In fact, every transaction that was printed this week was priced within its guidance levels which simply means that there was a very strong demand for the paper. While the succeeding weeks could be a letdown after this week’s $6.9 billion total, the next few weeks leading to the fast approaching labour Day should see a steady pipeline with a mixture of both large small-scale as well as large-scale issuers according to securitisation insiders.

Betting on Spread

The three prime issuers, including two names that have already been tapped by the market earlier this year priced its new deals for a total of $3.7 billion. Spread levels were much wider than their previous offerings during the first and second quarters of this year.

Triple A weighted an average spread of around 25bp at its present transaction. The subs in the 2013-B series were printed 20bp-30bp at 40bp, 60bp and 110bp. Moreover, Deutch Bank, Morgan Stanley and RBC were among the joint leaders on the Ford 2013-C offering.

Nissan was able to return with its second prime offering of the year, with $1.4 billion Nissan Auto Receivables 2013-B Owner Trust. The pricing levels were a bit tighter than Ford’s deal. Subscription levels across the deal were said to be two-to-four times oversubscribed.

JP Morgan, Societe Generale and Citigroup were the joint leaders. Investor demand increased its initial deal of $1 billion. Triple A noted that Nissan’s last deal was in January 2013-A series which were priced at EDSF plus 6bp, interpolated swaps plus another 10bo interpolated swaps plus another 16bp.

Finally, Mercedes was able to make its 2013 debut earlier this week with $975 million Mercedes-Benz Auto Receivables Trust 2013-1. It was the fifth issuer prime securitisation since its first appearance four years ago.

Last Updated: August 6th, 2013