The largest consumer loan-backed deal emerging ahead of a Federal Reserve loan application deadline has been increased in size.
Bank of America Auto Trust, dubbed BAAT 2009-1, was expanded to $3.939 billion, from an original $2.523 billion, according to Dan Nigro at Dynamic Credit Partners in New York.
The four-tranche deal, led by Banc of America Securities, is to be priced today, the deadline for investors to get cheap funding under the Fed's Term Asset-Backed Securities Loan Facility, or Talf, program.
The deal was launched, with the largest AAA-rated portion worth $1.448 billion and a duration of 1.99 years, at 135 basis points over a short-term futures benchmark.
The Talf program was set up to boost the securitization market. More than $12 billion of consumer loan-backed deals are set to be priced today.
Other issuers include Honda Motor Co., Harley-Davidson Inc., Discover Financial Services, Ford Motor Co., Chrysler Auto and SLM Corp., better known as Sallie Mae.
Honda's $1.827 billion Talf-eligible deal was also increased in size, from its original $1.5 billion, and has been launched.
Chrysler's $1.26 billion deal was launched, and price guidance is available on Ford Motor's $1.02 billion deal and Harley Davidson's $700 million deal.
Americredit's $725 million deal, dubbed Amcar 2009-1, was also launched.
Last week, Discover's $1.5 billion credit card loan-backed deal sold at 130 basis points over the one-month London interbank offered rate, or Libor, according to a person familiar with the deal.
The stream of issuance "continues to show that the program is a success," according to Nigro, a portfolio manager at Dynamic Credit Partners. "We are seeing much more investor participation."
About $43 billion of asset-backed securities were issued in the second quarter, according to data provider Dealogic.
The bulk of the issues were financed using the Fed's loans.
This market had become inactive during the height of the credit crunch.
Many of the recent deals are oversubscribed. Nigro cautioned that this may be because interest has grown and some investors may be asking for more than they actually want to buy.
In June, 13 Talf-eligible deals totaling $16.4 billion and three non-Talf deals for about $3 billion were sold. In May, $13.6 billion of Talf-eligible deals were sold, up sharply from April's $2.9 billion.
When the program was started in March, it got a lukewarm reception; four deals for $8.3 billion were sold.
Among non-Talf deals sold recently is a $1.845 billion credit-card-loan-backed deal from JPMorgan Chase & Co.
The central bank has expanded the $1 trillion program to include newly created commercial mortgage-backed securities and is likely to include existing commercial mortgage-backed securities this month.