IFR - 07.07.2018

9bp in the same period, according to Wells
Fargo data.
An ongoing hunt for yield in consumer
ABS has even made lower-rated tranches a
hot commodity.
“Both sub-prime auto and unsecured
consumer loan sectors have seen notable
growth as part of the current economic
EXPANSIONûANDûCREDITûCYCLEvû*0û-ORGANû
analysts wrote in their outlook. “On
AGGREGATEûCREDITûEXPANSIONNORMALISATIONû
with looser underwriting standards and
GROWINGûPAINSûWITHûTHEûDEVELOPINGûlNTECHû
INDUSTRYûAREûTOûBEûEXPECTEDv
Less conventional lenders such as
Oportun, Prosper and sub-prime auto
lNANCEûCOMPANIESûHAVEûTAKENûNOTICEûANDû
ramped up issuance of junk-rated ABS in the
PASTûSIXûMONTHS
And with dramatic spread tightening on
lower-quality bond tranches, the ABS Triple
!ûTOû4RIPLEû"ûSPREADSûINDEXûHASûCOMPRESSEDû
to 93bp, slightly more than its post-crisis

low of 83bp in 2014, according to Bank of

America Merrill Lynch data.

Though demand for the product remains

robust for now, market participants are keeping

an eye on potential bumps ahead, with ABS

spreads now near their lowest point in a decade -

and US mid-term elections on the horizon.

“By necessity, the securitised products

outlook for the second half of 2018 should

consider the implications of the November

mid-term elections,” Bank of America wrote

in their outlook.

“[But] overall, most if not all of the cycle’s

‘reach for yield’ spread compression appears

to be done.”

ASIA-PACIFIC MBS

COLUMBUS RMBS SETS SAIL

Non-bank lender COLUMBUS CAPITAL has

released initial price guidance for an

APPROXIMATELYû!M

EQUIVALENTû

dual-currency Australian dollar and Reg

S US dollar RMBS, COLUMBUS CAPITAL TRITON

2018-1.

MUFG, NAB and Westpac are joint lead

managers.

Price talk for US$100m Class A1-US

and A$185m Class A1-AU notes with

weighted-average lives of 1.4 years and

3.0 years is one-month Libor plus 85bp

area and one-month BBSW plus 123bp

area, respectively.

Guidance for the A$65m Class A1-5Y

notes with a 4.9-year WAL is one-month

BBSW plus 155bp area.

Price talk for the A$25m A2s, A$20.5m

A3s and A$8.5m ABs, all with 4.2-year

WALs, is 165bp area, 175bp area and

185bp area over one-month BBSW,

respectively.

For the A$46m pre-placed Class A1-MM

notes with a 0.4-year WAL, guidance is

one-month BBSW plus 70bp area.

SSAR

EUROS

Jul 4 2018 ADB (Green) €600m Jul 16 2025 0.35 99.924 MS-17 / B+43 0.361

Jul 4 2018 BNG €1.75bn Jul 11 2023 0.05 99.791 MS-16 / B+39.6 0.092

Jul 4 2018 Flemish Community €750m Jul 12 2038 1.5 99.214 BGB+23 / B+83.9 1.546

Jul 4 2018 NRW €1.25bn Jul 11 2068 1.75 98.556 MS+36 / B+79.7 1.794

Jul 5 2018 EIB €500m incr

(€3bn)

Oct 16 2048 1.5 100.752 - -

Jul 5 2018 Austria €250m incr

(€4.25bn)

Sep 19 2117 2.1 115.762 - -

STERLING

Jul 3 2018 IFC £350m Dec 15 2023 1.25 99.782 G+30 1.288

Jul 4 2018 Dexia CL £125m incr

(£1.125bn)

Jun 15 2022 1.125 98.922 G+61 1.404

Jul 4 2018 KfW £150m incr

(£1.6bn)

Feb 1 2021 1.375 100.987 G+25 0.98

Jul 5 2018 ADB £100m incr

(£450m)

Dec 15 2023 1.375 100.294 G+30 1.314

Jul 5 2018 KBN £100m incr

(£350m)

Dec 8 2020 0.875 99.638 G+32 1.025

Jul 5 2018 Quebec £500m Dec 15 2023 1.5 99.771 G+52 1.539

Jul 6 2018 EDC £100m incr

(£350m)

Dec 8 2023 1.375 100.147 G+34 1.342

NON CORE

Jul 3 2018 EIB R500m incr

(R1.5bn)

May 5 2027 8 - - -

Jul 4 2018 ADB A$150m Jun 15 2029 3.1 99.746 ASW+41, ACGB+54 3.128

Jul 4 2018 SAFA A$1bn May 24 2028 3 99.36 EFP+53,

ACGB+54.25

3.12

GLOBAL BOND SUMMARY DETAILS: WEEK ENDING 6/7/2018

Pricing date Issuer Amount Maturity Coupon (%) Reoffer Spread (bp) Yield (%)