JPMorgan's Non-TALF $1 Billion Deal Sold -Source
16 May 2009 - 2:48AM
Dow Jones News
JPMorgan Chase & Co.'s (JPM) $1 billion credit card
loan-backed deal sold Friday, according to a person familiar with
the matter.
The self-led deal, which was increased in size to $1 billion
from $700 million amid strong demand, was not eligible for funding
under the Federal Reserve's Term Asset-Backed Securities Loan
Facility, or TALF.
The single tranche, triple-A rated deal, dubbed CHAIT 09-A3,
sold at 115 basis points over a benchmark rate, in line with
guidance.
The bond's maturity is 2.067 years.
May 4, JPMorgan sold a $5 billion TALF-eligible credit-card
loan-backed deal at 155 basis points over the one-month London
interbank offered rate, or Libor. This was the largest
TALF-eligible bond sold since the Fed launched the program in
March.
"Chase is the gold standard in credit cards," said Dan Nigro, an
asset-backed securities portfolio manager at Dynamic Credit
Partners. They are doing non-TALF deals "because they can."
Investors who have not filled out TALF documents but need bonds
and "relatively bullet-proof credit" will be the likely buyers,
Nigro said.
The central bank provides nonrecourse loans to investors to buy
mostly consumer-loan backed bonds through TALF.
Since March, TALF-eligible bonds worth more than $25 billion
have sold. Non-TALF issuance stands at more than $10 billion.
JPMorgan did not immediately return calls for comment.
-By Anusha Shrivastava, Dow Jones Newswires; 201-938-2371;
anusha.shrivastava@dowjones.com