SCIWire

US ABS tightens

Tuesday 14 February 2017 14:21 London/ 09.21 New York/ 22.21 Tokyo

US ABS secondary market spreads keep tightening despite continued supply.

Appetite for paper in secondary remains strong across the majority of ABS sectors and even any uptick in primary issuance is having little impact. For example, the announcement of two new sizeable American Express deals saw credit card spreads continue to tighten in both fixed and floating.

Further, the growing cards issuance pipeline brought more sellers to market generating increasing BWIC volumes in the sector over the end of last week and in to this. Nevertheless, the supply is being easily absorbed with bonds in for the bid trading in line with market expectations.

In addition to cards, autos and stranded assets continue to lead the way in testing recent tights, but other sectors are not lagging far behind. Overall, healthy secondary ABS activity looks set to continue for now at least as cash-rich investors hold sway.

The visible US ABS BWIC calendar for today is currently relatively, though starting to build quickly as today wears on. For now, one of the highlights is a three line subprime auto list due at 13:00 New York time.

The $14.5m auction involves: DTAOT 2016-1A D, DTAOT 2016-2A D and FCAT 2016-1 C. None of the bonds has covered on PriceABS in the past three months, but are currently being talked between LM100s and VH100s.

14/02/2017 14:21:50