Subprime auto lender First Enterprise Financial Inc. of Evanston, Ill., this week sold $44.1 million in asset-backed securities.
The securitization is the first by a subprime auto lender since the sector's highly publicized financial problems began in January. The securities were bought by an insurance company and a pension fund, according to a trader familiar with the transaction.
The privately placed offering was led by Banc One Corp. and insured against default by Financial Security Assurance. It was rated triple-A by Moody's Investors Service and Standard & Poor's, according to First Enterprise chief financial officer Jan W. Erfert.
"We were a little nervous" going into the deal, Mr. Erfert said, "but we're very pleased with the result."
As a subprime lender, First Enterprise makes loans to customers with bad credit. Last month the company reported fourth-quarter earnings of 5 cents per share, 80% below expectations.
Spreads widened from previous offerings.
A trader said the package sold for 69 basis points over Treasuries, while previous deals sold for 63 points over.
"Obviously there were hurdles we had to go over that we hadn't had before," the trader said.
