Mitsubishi Motor's $209 Million Deal Launches; To Be Sold Tuesday-Source

Mitsubishi Motors Corp.'s (7211.TO) $209 million deal has launched, a person familiar with the matter Tuesday.

The bond, dubbed Mitsubishi Auto Owner Trust (MMCA) 2009-A, is eligible for funding under the Federal Reserve's Term Asset-Backed Securities Loan Facility, or TALF. It is expected to be sold later Tuesday, the loan application deadline for funding under the program.

The largest tranche worth $73 million has launched at 250 basis points over a short-term futures benchmark.

The deal was created as a result of reverse enquiry, according to a market participant.

On Monday, JPMorgan Chase & Co. (JPM) sold its $5 billion credit-card-loan-backed deal and market participants said that deal, the largest TALF eligible so far, was also created as a result of reverse enquiry.

On Tuesday, deals from General Electric Co.(GE), Harley Davidson Inc. (HOG), Honda Motor Co. (HMC), CNH Global N.V. (CNH) and Volkswagen AG (VLKAY) are scheduled to be sold.

Eligible new issuance stands at a little over $11 billion, a notable increase over issuance seen in the first two months of the TALF, when investor wariness kept many on the sidelines.

The spurt in issuance of TALF-eligible deals and the subsequent increases in size of these bonds are signs that investors have finally warmed up to the Fed's consumer lending program.

TALF is aimed at jump-starting consumer lending.

Investors apply for loans to finance bonds backed by credit cards, student loans, and other consumer loans once a month. Issuers have clustered bond sales around the loan application deadline, which is the first Tuesday of the month.

The Fed will accept loan applications between 1 p.m. and 3 p.m., EDT, and will release information about how much investors applied for later Tuesday.

TALF-eligible issuance stood at $8.2 billion in March and just $2.57 billion in April.

-By Anusha Shrivastava, Dow Jones Newswires; 201-938-2371; [e-mail]