After a pause of about three weeks, the consumer loan-backed securities market came roaring back Monday as companies announced more than $3.5 billion of asset-backed bonds.
The auto sector took the lead. Nissan Motor Co. announced a $1 billion bond, BMW AG, a $750 million deal, and AmeriCredit Auto Receivables Trust, a $700 million bond.
Discover Financial Services has a $500 million credit card loan-backed bond, and All Student Loan Group has a $458.32 million student loan-backed bond, according to people familiar with the matter.
Through Friday, the asset-backed market had year-to-date issuance valued at $72.29 billion, according to Citigroup Inc. During the same period last year, the total was $98.69 billion.
Activity in the credit card sector has been markedly slow: Year-to-date issuance through Friday stood at $5.3 billion, down from $31.3 billion at this point in 2009, according to Asset-Backed Alert, a trade publication. This is a decline of 83%, at a time when overall sales of asset-backed bonds are up about 1.3%. Issuers are concerned about changes in accounting rules and other regulations, crimping new bond sales.
Discover's single-tranche bond is jointly led by Deutsche Bank Securities and the JP Morgan Securities unit of JPMorgan Chase & Co. Price guidance on the bond is 58 basis points over the one-month London interbank offered rate.