March 27, 2014 / 10:45 PM / 4 years ago

GM Financial pre-markets first ever auto-lease ABS

NEW YORK, March 27 (IFR) - GM Financial is pre-marketing its first ever auto-lease ABS in a market lacking supply after a burst of issuance last week.

The transaction, expected to be sized at over USD705m and led by Deutsche Bank as the structuring lead and JP Morgan, is expected to be announced early next week. The auto lender is expected to issue six tranches of notes that include three Triple A rated tranches and one short-term piece.

“It has been a pretty modest issuance week and we could probably continue to see light volumes in the first week of the second quarter,” said one banker. “The first quarter was much busier than expected so now there is a bit more pacing of transactions to allow the market to digest the supply so far.”

More than USD6bn was priced in ABS last week which took year to date issuance to USD51.9bn, ahead of last year’s pace when USD46.9bn was priced.

The only ABS to price today was CHAIT 2014-A3’s USD1.425bn Class A notes, backed by credit card receivables, at one-month Libor plus 20bp.

Meanwhile, market attention was diverted somewhat by regular issuer and auto lender Ally Financial’s launch of a long-awaited USD2.7bn IPO that will allow the US Treasury Department to significantly reduce its overhanging bailout-era investment in the company.

The IPO will consist of 95m shares being sold by Treasury, representing 20% of Ally, in a marketing range of USD25-USD28. The Treasury’s stake, one of its last large remaining investments outstanding after the financial crisis, will fall from 36.8% to as low as 14.1%, assuming exercise of the underwriter’s overallotment option.

The IPO values the former General Motors auto finance arm at USD13.5bn, or roughly 1.1-times book value of USD14.2bn as of December 31.

“It would be hard to find any ABS investor on the street which does not hold Ally bonds and they probably are looking at this announcement with optimism on the view that the company’s servicing abilities would be more enhanced in private hands compared with when it was owned by the government,” said one banker.

Ally has raised over USD4.71bn so far this year issuing five trades and in the whole of 2013 it issued USD8.8bn in structured products. There was hardly any secondary activity following the IPO launch with many in the market saying it was probably because the event was already priced in.

The IPO has been a long-time coming. Ally first filed to go public in March 2011, but regulatory and restructuring issues have long dogged the process. This week’s Federal Reserve approval of Ally’s capital plans (it had previously failed the Fed’s stress tests) was the trigger to the IPO finally moving ahead.


CHAIT 2014-A3: JPM priced its US$1.425bn floating-rate credit card transaction. The 2.12-year floater printed at one-month Libor plus 20bp. It was also upsized from US$1bn.


MBALT 2014-A: Mercedes-Benz has mandated Citi (structuring), BNPP and BAML as joint-bookrunners on its upcoming prime auto lease securitization. Subject to market conditions, the deal is expected to announce the week of March 31st.

GMALT 2014-1: Deutsche Bank (structuring) and JPMorgan will be joint-bookrunners on the inaugural $705+MM no-grow auto lease ABS deal for GM Financial. This will be a Rule 144A private placement transaction, and all notes will be rated by Moody‘s/Fitch. Subject to market conditions, it is expected to announce early next week.

JDOT 2014: John Deere has mandated BAML (structuring), Barclays and HSBC as joint lead managers on an ~US$1bln equipment transaction. Subject to market conditions, JDOT 2014 is expected to announce as early as next week. The deal will not upsize.

GEEST 2014-1: General Electric Capital Corporation has mandated RBC (structuring), and BAML as joint bookrunners on an upcoming US$718+m 144a small ticket equipment lease issuance from the GE Equipment Small Ticket, LLC platform (GEEST). Subject to market conditions, it is expected to formally announce the transaction early next week. It will also not grow in size.


CFIP CLO 2014-1: WFS priced the US$411.8m CLO for Chicago Fundamental Investment Partners, LLC. The 5.97-year Triple A slice priced at a coupon of Libor plus 155bp and a discount margin of 160bp. The transaction has a two-year non-call and a four-year reinvestment period.


GOLUB CAPITAL PARTNERS CLO 19(B): Citigroup has gone subject on the A-1A, A-1B, A-2 and subordinate classes of the US$410.125m CLO. The class B, C, D and E notes are being talked at 310a/410a/610a/710a. Pricing is expected on April 3rd. GC Investment Management is the collateral manager.

CATAMARAN CLO: The Single A and Double B classes have gone subject on the US$468+m CLO managed by Trimaran Advisors. The single B slice is being talked at 700bp-710bp area. Citigroup is the sole lead.


GSMS 2014-GC20: Goldman and Citigroup have released guidance on the US$1.028bn conduit. The 9.81-year A5 tranche is being talked at Swaps plus 90 area. Pricing is expected today, but was not available at press. (Reporting by Shankar Ramakrishnan and Charles Williams; Editing by Natalie Harrison)

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