BONDS STRUCTURED FINANCEpredominantly concentrated in and around
Chicago, Illinois and South Florida.
Largest tranche: Class A US$88m, with
6.89-year WAL, rated Triple A; priced at
Libor plus 78bp.
RMBS PRICED
CALIBER HOME LOANS
CALIBER HOME priced a US$372.925m
residential mortgage-backed transaction
called COLT 2018-1 MORTGAGE LOAN TRUST. Nomura
was structurer and lead manager along with
Credit Suisse.
COLLATERAL: ûNON
QUALIlEDûMORTGAGESû
originated by Caliber; WA credit score of
700, according to Fitch presale.
LARGEST TRANCHE: Class A-1 US$264.599m,
with a 2.03-year WAL, rated Triple A; priced
at interpolated swaps plus 63bp.
SEMT 2018-2
REDWOOD TRUST priced a US$436.438m prime
jumbo RMBS transaction called SEQUOIA
MORTGAGE TRUST 2018-2. Wells Fargo was the sole
bookrunner.
Collateral: 717 residential mortgage loans
WHICHûFALLûUNDERûTHEûSCOPEûOFûTHEûQUALIlEDû
mortgages (QM)/Ability-to-Repay (ATR) rule
and designated as QM (Safe Harbor) or QM
Agency/GSE eligible; according to KBRA.
LARGEST TRANCHE: Class A4 US$185.511m
(super senior) with 2.80-year WAL, rated
Triple A; priced at 100 22+/32nds.
US ABS
AUTOS DRIVE BIGGEST ABS WEEK
SINCE OCTOBER
Investors snapped up more than US$9bn of
asset-backed bonds last week, with auto
companies accounting for more than three-
quarters of supply in the sector’s busiest
week since October.
From top-notch prime deals to offerings
from the more volatile rental car sector, the
BUYSIDEûSHOWEDûSTRONGûDEMANDûFORûTHEûlRSTû
big surge of ABS supply in 2018.
BMWûPRICEDûAû53BNûTRADEû
ûITSûlRSTû
retail deal since 2016 - at exceptionally tight
spreads that underscored the strength of
demand.
)TSû53MûlXED
RATEû
YEARûTRANCHEû
priced at just 7bp, its US$360m 2.22-year at
interpolated swaps plus 10bp, and its
US$150m 3.41-year at interpolated swaps
plus 16bp.
All those levels were tighter than
guidance, and offered the skinniest yields of
a trio of prime deals this week rounded out
by CARMAX and MERCEDES-BENZ.
The latter also pulled in pricing on all
three Triple A rated tranches of its
US$1.286bn prime auto lease deal, while
CarMax upsized its trade to US$1.35bn from
US$1.15bn.
“At the top end of the credit spectrum,
spreads are so tight,” one syndicate banker
told IFR.
The more limited returns on offer affected
the size of some order books, which were
not as chunky as a few months back, the
banker said.
BMW’s A4 tranche was heard three times
covered, the A3 about twice covered and the
A1 and A2 tranches about 1.5 times covered.RETURNS POLICYBut investors remain keen to buy paper with
better returns.
#ARûRENTALûlRMûHERTZ, dogged in recent
months by investor concerns about the
declining value of used cars, was still able to
upsize its deal to US$1bn from US$600m.
In addition, the company was able to raise
funds much more cheaply than in
September, with the new deal crossing the
line at a massive 57bp-150bp inside levels on
that deal.The largest US$458.42m 5.09-year Triple A
rated tranche priced at swaps plus 88bp.
That was inside guidance of 95bp-100bp and
well inside the 145bp on its previous trade.
The bottom Triple B rated tranche, the
smallest of the three on offer at US$33.64m,
priced at plus 200bp - tight to 215bp-225bp
guidance and better than September’s
comparable 350bp print.
Since then, however, secondary has
rallied. Rival AVIS also came to market with a
US$500m deal in December that helped set a
current benchmark for the sector.
Its Triple A and Triple B tranches came at
78bp and 200bp over swaps - similar to
Hertz’s new levels.
“It could be that the downdraft in used car
prices has not been as bad as some people
thought,” a second banker said. “But really
the story is that it’s the start of the year and
investors are just scrambling. It’s really
fortunate timing.”
Other sectors also got a warm welcome.
SOCIAL FINANCE upsized its US$960m
student loans deal by about US$240m - and
also got tight pricing.
The biggest tranche, a US$484.4m 1.49-
year rated Triple A, launched at EDSF plus
25bp. That was 5bp tighter than the
comparable tranche from its last deal in
December.
More deals are already pre-marketing for
this week, including other auto deals from
ALLY, EXETER, FORD and TOYOTA.DRIVE-IN CHAIN SONIC PULLS INTO
BOND MARKETSONIC, the biggest drive-in restaurant chain
in the United States, is looking to sell a
whole business securitisation that will
RElNANCEûDEBTûANDûFUNDûAûRETURNûTOû
shareholders.
4HEû53MûBONDûWILLûBEûTHEûlRSTûOFûITSû
kind this year and follows a record
performance for WBS in 2017, when moreUS ASSET-BACKED SECURITIES
BOOKRUNNERS: 1/1/2018 TO DATE
Managing No of Total Share
bank or group issues US$(m) (%)
1 MUFG 3 1,185.48 13.1
2 Mizuho 3 1,095.36 12.1
3 BAML 3 985.50 10.9
4 BMO 3 960.03 10.6
5 RBC 2 826.69 9.1
6 Barclays 2 756.73 8.4
7 JP Morgan 2 749.97 8.3
8 Citigroup 2 724.09 8.0
9 Credit Suisse 2 511.64 5.6
10 Deutsche Bank 1 376.75 4.2
Total 9 9,062.31
Excludes MBS.
Source: Thomson Reuters SDC code: F14
STRUCTURED FINANCE – ALL INTL ISSUERS
BOOKRUNNERS: 1/1/2018 TO DATE
Managing No of Total Share
bank or group issues US$(m) (%)
1 Cooperatieve Rabobank 1 1,309.36 17.4
=1 SG 1 1,309.36 17.4
3 BNP Paribas 3 840.43 11.2
4 Morgan Stanley 1 807.32 10.7
5 BMO 2 583.28 7.8
6 Wells Fargo 2 515.38 6.9
7 Citigroup 2 504.99 6.7
8 BAML 2 367.34 4.9
9 JP Morgan 1 333.32 4.4
10 Lloyds Bank 2 297.86 4.0
Total 9 7,511.47
Includes securitisations, PFI bonds, self-funded issues and credit-linked
notes. Excludes US global ABS/MBS and CDOs.
Source: Thomson Reuters SDC code: J10cGLOBAL STRUCTURED FINANCE IN US$
BOOKRUNNERS: 1/1/2018 TO DATE
Managing No of Total Share
bank or group issues US$(m) (%)
1 MUFG 3 1,185.48 11.3
2 Mizuho 3 1,095.36 10.4
3 BAML 3 985.50 9.4
4 BMO 3 960.03 9.2
5 Wells Fargo 3 951.82 9.1
6 RBC 2 826.69 7.9
7 Morgan Stanley 1 807.32 7.7
8 Barclays 2 756.73 7.2
9 JP Morgan 2 749.97 7.2
10 Citigroup 2 724.09 6.9
Total 12 10,488.13
Including securitisations (Euro, foreign, global and domestics, excluding
CDOs) and PFI bonds.
Source: Thomson Reuters SDC code: B16b