Structured finance selling well

Year to date issuance in the structured finance sector is running well ahead of the same time last year.

With total issuance of more than A$32 billion, 2013 was the best year for the sector since 2007.

Prime RMBS issuance is leading the way for the sector this year, and at $14 billion, issuance exceeds the end of June 2013 volume by 22 per cent or $2.5 billion.

IDOL 2014-1 Trust added to the total last week.

Launched at A$500 million, the issue was upsized to A$1.25 billion on strong demand from domestic (66 per cent) and international (34 per cent) investors. Moreover, the spread to be paid on the $1.15 billion of Class A notes, with a weighted average life of 2.8 years, was set at just 83 basis points over 30 day bank bills.

ING Bank Australia paid 100 bps over on the Class A notes issued by IDOL 2013-2 Trust in August last year.

The remainder of the 2014-1 issue comprised $75 million of Class AB notes, priced at 145 bps over, and A$25 million of Class B notes. Pricing was not disclosed for the Class B notes. Both the AB and B notes have weighted average lives of 5.6 years.

Macquarie Group last week also upsized its latest SMART auto and equipment lease transaction to A$1.035 billion, from $500 million, when launched at the start of the week. The SMART ABS Series 2014-2E transaction incorporates a euro denominated tranche for the first time in six years.

It said that 22 investors participated in the deal.

The Class A tranche was divided between A$560 million of Class A-A notes and €225 million of Class A-E notes.

Both tranches have a WAL of 1.9 years and were priced at 80 bps over bank bills and 43 bps over Euribor, respectively.

The Class B tranche and Seller notes amounted to A$25.9 million and A$119 million, with WALs of 2.6 years. Pricing was not disclosed on these tranches.

Fitch Ratings and Moody's have assigned preliminary ratings of 'AAAsf' and 'Aaasf' to the Class A notes and 'AAsf' and 'Aa2sf' to the Class B notes. The Class C notes have not been rated.