February 2018 Consumer ABS Update

Monthly Commentary

March 05, 2018

New Issue

  • A total of $18bn of Consumer ABS priced in February. YTD issuance stands at $43bn, a 25% increase from 2017
  • Issuance remained strong throughout a volatile month in the markets and the pipeline continues to grow as issuers look to take advantage of historically low spreads in the ABS sector
  • February issuance of note include:
    • Tesla priced its inaugural auto lease deal backed by lease payments on its Model S and X cars. The $545mm deal priced inside guidance with the $422mm 0.8-yr Aaa rated class pricing at e + 30 and the 2-yr Ba3 rated class at S + 265
    • PFS priced a $600mm insurance premium finance deal with the 2-yr Aaa/AAA floater pricing at L + 40
    • Vantage priced a $1.1bn ABS deal backed by lease payments on six operating data centers and one data center in development. Weighted average remaining lease term is 8.3 years. The 5-yr A- rated note priced 15 bps inside guidance at S + 150
    • Two wireless tower deals:
      • Vertical Bridge priced a $236mm cell tower deal with the 5-yr A rated note pricing at T + 88
      • SBA priced a $640mm 5-yr A2 rated note at T + 85
    • CAI issued a $350mm container ABS deal with the 5-yr single A rated note pricing at approximately S + 130
    • Global Jet Capital priced a $600mm Aircraft ABS deal backed by lease payments on 67 business jets. The 3.2-year A rated class priced at approximately S + 167
    • Two consumer loan deals:
      • OneMain priced a $600mm deal with the 3.57-yr AAA rated class pricing at S + 60
      • Oportun priced a $200mm deal with the 3-yr A- rated note pricing at S + 100


  • With the volatility in the equity markets, ABS spreads bounced off post crisis tights in February, giving back their January gains
  • Generic AAA rated ABS widened 2-5 bps and subordinate bonds widened 15-25 bps over the month

Consumer News

  • Bon-Ton Stores filed for Chapter 11 earlier this month and thus expect to see higher charge offs in its private label credit card securitization program with Comenity Bank. Impact to the ABS bonds is estimated to be minimal.


Source: JP Morgan ABS Research


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