46 International Financing Review September 8 2018previous week. A new issue off its UK
RMBS platform GOSFORTH FUNDING is due to
follow.
The deal is expected to issue in dollars,
but given recent sterling weakness it is not
known if Virgin will choose to issue in
sterling too.
Bank of America Merrill Lynch, BNP Paribas,
Citigroup and Lloyds share the mandate.ALDERMORE RETURNS TO OAK RMBS
AFTER FOUR YEARSUK challenger bank ALDERMORE announced
its second UK RMBS on Thursday after a gap
of over four years since the 2014 debut issue
off its Oak platform.
Aldermore, which has £1.67bn
outstanding drawings under the Term
Funding Scheme, was bought by FirstRand
earlier this year.
The new RMBS, OAK NO.2, is offering a 2.92-
year Triple A tranche via joint arrangers and
joint leads JP Morgan and Lloyds. A London
roadshow begins on Monday.
The notes are backed by prime owner-
occupied mortgages with a current balance
of £390m. There are 2,535 loans with an
average £154k balance. The weighted
average original LTV is 75.7%, seasoning is
11.7 months and the WA current interest
rate is 4%.
The first deal, Oak No.1 in April 2014,
used the same lead managers to sell a
£333.3m 3.22-year Triple A at 67bp over
three-month Libor.EMEA ABS
SILVER ARROW AIMS SHORT WITH
NEW UK ISSUEMERCEDES-BENZ FINANCIAL SERVICES announced a
new UK auto loan ABS issue on Thursday,
offering sterling investors paper outside the
crowded RMBS sector.
That paper is structured with a short
maturity. SILVER ARROW UK 2018-1 is offering a
Triple A tranche with a 0.94-year weighted
average life.
“Anything shorter has done very well [in
the secondary market]”, according to one
ABS trader, who said investors expecting
spreads to widen are looking for places to
park cash.
“They’ll buy short duration bonds as a
way to balance the carry before going into
something better value later in the year,”
the trader said.
The new Silver Arrow deal is very similar
to the originator’s last UK transaction, in
which it sold £440m of 1.05-year senior
notes at 35bp over one-month Libor in
September last year.
Spreads have since widened. The most
recent UK auto captive issue was BMW’s
Bavarian Sky UK 2 in early July, which was
£300m of 1.86-year paper sold at plus 55bp.
The new Silver Arrow transaction is
backed by a static portfolio of fixed rate
loans with a new/used split of 72%/28%. Hire
purchase contracts make up 10% andpersonal contract plans make up 90%.
Weighted average seasoning is 16 months
and the average current outstanding value is
£19k.
Lloyds arranged the deal and is joint lead
with Bank of America Merrill Lynch.
Bookbuilding and pricing is due this week.US MBS
FANNIE SELLS REINSURERS APARTMENT
LOAN RISKSHousing giant FANNIE MAE has a new way to
offload risks associated with its massive
multifamily finance business.
Fannie sold some US$166m of insurance
policies on a huge US$11.1bn portfolio of
multifamily property loans to a group of
seven reinsurance companies.
The deal is part of Fannie’s effort to
reduce taxpayer exposure to its large book
of single-family home and apartment
buildings loans.
Fannie is on the hook for up to 2.25%
losses on the pool. But the group of
reinsurance firms are next in line if losses
climb above 2.25% up to 3.75%, according to
Jonathan Gross, vice president in Fannie
Mae’s multifamily unit.
“It really works like the bonds work in our
Connecticut Avenue Securities credit-risk
transfer deals,” he told IFR. “But because we
are dealing with reinsurers, it is insurance
policies as opposed to bonds.”SSAR
US DOLLARS
Sep 5 2018 EIB US$3bn Dec 15 2021 2.875 99.993 MS-1 / T+15.85 2.878 MS+1 area,
MS flat area
US$6.2bn, >100acs Aaa/AAA/AAA Barc/Citi/RBC Amers 38%, EMEA 32%, APAC 30%. CB/
OI 61%, Tsy 26%, AM 13%.
EUROS
Sep 4 2018 Lower Saxony €750m Sep 12 2033 1.125 99.003 MS-4 / B+75.2 1.198 MS-2 area 0 >€1.1bn, >40 acs -/-/AAA Deka/DZ/Natx/NordLB/Uni Ger 62.7%, Fr 12.3%, UK 10.9%, Switz
4.5%, Benelux 3.5%, S.Eur 3%, RoEur
1.6%, Asia/EMEA 1.5%. Bks 36.9%, FM
55.4%, Ins 7.7%.
Sep 5 2018 KfW €1bn incr
(€5bn)
Mar 15 2023 0.375 101.972 MS-28 / B+24.7 -0.062 MS-28 area - - Aaa/AAA/Scope
AAABarc/DZ/NatWest -Sep 5 2018 NRW €250m
incr(€1.25bn)Feb 22 2038 1.65 104.02 MS+1 / B+67.2 1.412 MS+1 area - - Aa1/AA-/AAA BAML/DB/JPM/NordLB -Sep 6 2018 EIB (SAB) €500m May 15 2026 0.375 99.474 MS-20 / B+37 0.445 MS-18 area,
MS-19 area0 >€1.1bn, >50acs Aaa/AAA/AAA BAML/CA-CIB/CMZ/SEB/Uni Benelux 28%, Nordics 21%, Asia 18%,
Ger/Aus 13%, UK 13%, It 3%, Fr 3%,
Other 1%. Ins/PF 33%, Bks 33%, CB/OI
18%, FM 16%.
Sep 6 2018 Rentenbank €150m incr
(€2.25bn)Jun 12 2023 0.05 100.275 - -0.008 - - - Aaa/AAA/AAA BAML/Deka/Uni -SWISS FRANCS
Sep 3 2018 Kanton Basel-Stadt (Green) SFr230.885m Sep 24 2025 0 100.368 MS-14 / Eidg+28 -0.053 MS-14 (the #) 0 - -/AA+ KBBS -
NON CORE SSAR
Aug 30 2018 EIB SKr250m incr
(SKr3.25bn)May 12 2028 1.375 102.044 - - - - - Aaa/AAA/AAA SEB -Sep 3 2018 NWB A$25m incr
(A$1.025bn)Jul 17 2028 3.45 102.506 ASW+59 /
ACGB+64.753.152 - - - Aaa/AAA Miz -Sep 4 2018 AfDB SKr500m incr
(SKr1.373bn)Sep 21 2027 1.245 - - - - - - Aaa/AAA/AAA HCM -GLOBAL BOND SUMMARY DETAILS: WEEK ENDING 7/9/2018
Pricing date Issuer Amount Maturity Coupon (%) Reoffer Spread (bp) Yield (%) Pricing steps NIP (bp) Book size Ratings Bookrunners Distribution6 Bonds 2250 p25-55.indd 46 07/09/2018 19:30:01