GE Offers $1.25 Billion Credit Card Loan-Backed Deal - Source
July 30 2009 - 4:33PM
Dow Jones News
General Electric Co. (GE) is the latest company to offer a
credit card loan-backed deal eligible for funding under a U.S.
Federal Reserve program, according to a personal familiar with the
matter.
The $1.25 billion deal, dubbed GE Capital Credit Card Master
Trust Note, has RBS and Credit Suisse as joint leads.
The deal is among a clutch that have emerged ahead of next
week's loan application deadline for the consumer loan backed
portion of the central bank's Term Asset-Backed Securities Loan
Facility, or TALF. The sixth deadline for loan applications for
this sector is Aug. 6.
A substantial portion of the consumer loan-backed deals sold
this year were eligible for TALF. The program is credited with
having thawed the securitization market and helping lower borrowing
costs for consumers. Launched in March, it received a tepid
welcome, but issuers and investors have since warmed to it, with
many hoping it is extended past its scheduled expiration at the end
of this year.
The Fed has recently also begun to offer attractive financing
for new and existing commercial mortgage-backed loans in an effort
to revive that sector. The next loan application deadline for the
commercial-property portion is Aug. 20.
"It made sense that the initial focus of TALF was on the auto,
credit-card and student-loan sectors so it could restart those
markets," said Howard Chin, a portfolio manager at Guardian
Investor Services in New York.
On Thursday, First National Bank of Omaha is marketing a
single-tranche $500 million credit card loan-backed deal with a
maturity of 2.93 years. The issue, dubbed FNMNT 09-3, is scheduled
to price early next week, according to a person familiar with the
matter. Joint leads on the deal are JP Morgan Chase & Co. (JPM)
and Bank of America (BAC).
Wheels Inc. is offering a $703.3 million TALF-eligible fleet
lease-backed deal, according to a person familiar with the deal.
Price guidance is out on the issue, dubbed Wheels 2009-1. On the
top-rated tranche worth $673.9 million and with a duration of one
to 36 months, it is in the range of 165-175 basis points over the
one-month London Interbank Offered Rate, or Libor. Joint leads on
the deal are Banc of America Securities and JP Morgan Chase.
Student lender SLM Corp. (SLM), better known as Sallie Mae, is
also offering a TALF-eligible $1.68 billion student loan-backed
deal, according to a person familiar with the matter. The deal,
dubbed SLM Student Loan Trust 2009-D, has Barclays Capital, Bank of
America and JP Morgan as joint leads.
Issuance of asset-backed securities stands at nearly $80 billion
this year, down from $126 billion at this time last year, according
to Asset-Backed Alert, a trade publication. In July, eight
TALF-eligible consumer loan-backed deals worth $12.079 billion were
sold. Issuers included Honda Motor Co. (HMC), Harley-Davidson Inc.
(HOG), Ford Motor Co. (F) and Chrysler Group LLC. In the previous
month, 13 deals worth $16.4 billion were sold.
-By Anusha Shrivastava, Dow Jones Newswires; 212-416-2227;
anusha.shrivastava@dowjones.com