SCIWire

US ABS firm

Tuesday 9 May 2017 14:39 London/ 09.39 New York/ 22.39 Tokyo

Tone and spreads remain firm in the US ABS secondary market though activity has dipped.

Flow and BWIC volume last week and this has declined from previous high levels as market participants' focus has been drawn to primary with heavy issuance expected this month. That supply is yet to fully materialise, but when it does could also boost BWICs once more with rotation activity.

Meanwhile, secondary spreads remain flat to slightly tighter in most sectors thanks to pent up demand and positive fundamentals. One exception is subprime autos, which widened a little last week, though they could quickly reverse as investors have begun looking for yield beyond the recent focus of higher quality paper in the main sectors.

Equally, more esoteric areas such as container and equipment ABS are gaining some traction. Notably, the former has seen a flurry of BWICs in recent sessions, including a six line auction yesterday, all of which have traded well.

Today's BWIC calendar is steadily growing and half a dozen lists are already circulating. The longest of which is a $34.5+m five line student loan seniors auction due at 13:15 New York time.

It comprises: NAVSL 2014-8 A2, NAVSL 2017-1A A1, NAVSL 2017-1A A2, SLCLT 2006-2 A5 and SLMA 2005-3 A5. None of the bonds has appeared on PriceABS in the past three months.

09/05/2017 14:39:41