Bella an ABS rarity
In other domestic market activity, International Finance Corporation, sister organisation to the World Bank, made a third top-up to its June 2014 line on Friday. IFC added A$550 million, priced at CGS+79.5 basis points, to take outstandings to A$1.8 billion. It added A$500 million in July after launching the line at A$750 in June.But the highlight of the week was the announcement of only the third ABS issue for the year. Lloyds Banking Group-owned Capital Finance Australia Limited is to sell A$621 million of securities that refinance a pool of loans and leases over cars and trucks via Bella Trust Series 2009-1. Roadshows will be held next week and pricing of the issue is scheduled for November 17.Provisional ratings by Standard & Poor's and Moody's Investors Service show that the latter took a more optimistic view of the credit quality than the former. S&P and Moody's agree only on the credit rating appropriate to the A$500 million senior tranche (the A-2 notes), and rated AAA/Aaa.Differences emerge on the credit rating on all junior tranches. The A$51 million of Class B notes in the Bella transaction are rated A/Aa2; A$23 million of Class C notes are rated BBB/A2; A$8.1 million of Class D notes are rated BB/A3; and A$8.1 million of Class E notes are rated B/Baa2. There are A$31.1 million of unrated seller notes.Release of the provisional credit ratings on the transaction coincided with Moody's release of its September quarter review of the asset-backed securities market.Moody's says the Australian ABS market is showing signs of stabilisation and a return to optimism, echoing similar developments in the wider Australian economy. "There was material performance deterioration in the first half of 2009, but the impact has so far proven to be limited. We are now cautiously optimistic."