Sales of bonds backed by everything from timeshare rentals toshipping containers to entertainment royalties are poised to risethis year as investors seek to boost returns with interest rates atabout record lows.

So-called esoteric asset-backed securities issuance may soar12.9 percent to $35 billion, compared with debt linked to moretraditional collateral such as auto and credit-card loans, whichwill grow 8.75 percent to $87 billion, according to a forecast fromCredit Suisse Group AG.

Barclays Capital, Citigroup Inc. and Wells Fargo & Co. aredirecting investors toward the debt with Federal Reserve ChairmanBen S. Bernanke pledging to keep benchmark interest rates, held atzero to 0.25 percent since 2008, “exceptionally low” throughmid-2013. Investors willing to hold BBB rated bonds backed byfranchise royalty fees of the Sonic Corp. fast- food chain mayreceive as much as 2 percentage points more annually than similarlyrated securities tied to auto loans, according to BarclaysCapital's Cory Wishengrad in New York.

“The ability to pick up incremental yield while not takingadditional risk makes esoteric ABS attractive,” Wishengrad, co-head of securitized products origination, said in a telephoneinterview. “Given the low-rate environment, investors view movinginto less traditional asset classes as more attractive.”

Esoteric bonds make up 16 percent of the $620 billion market forasset-backed securities outstanding, with debt tied to credit card,student and auto loans accounting for the rest, according to datafrom Wells Fargo.

Cronos Containers Ltd. boosted the size of its November offeringof bonds tied to shipping container lease payments by $50 millionto $200 million, according to data compiled by Bloomberg. AnA-rated $170 million portion maturing in five years priced to yield5 percent.

The sale marked the first issue of asset-backed notes for theMarlow, U.K.-based provider of equipment services to oceancarriers, Peter J. Younger, president and chief executive officer,said in a statement on Dec. 7.

Sales of esoteric asset-backed securities, which can be linkedto just about any asset that produces a revenue stream, areforecasted to pick up as the U.S. economy shows signs ofstrengthening. Economists forecast 2.1 percent growth this yearfrom 1.8 percent in 2011, according to a Bloomberg survey.

Bowie Bonds

The market gained attention in 1997 when banks arranged $55million of so-called Bowie Bonds, tied to royalties from rock iconDavid Bowie. Other musicians that have tapped the market for cashinclude James Brown and the Isley Brothers, according toMoody's.

Top-rated asset-backed securities returned 2.8 percent lastyear, following a gain of 4.3 percent in 2010, Bank of AmericaMerrill Lynch index data show.

Performance of asset-backed portfolios may be improved by 15percent to 24 percent by adding a mix of esoteric securitiesincluding bonds linked to shipping containers and aircraft leases,Citigroup analysts led by Mary Kane wrote in a Dec. 8 report.

Such bonds offer a “collateralized play” on corporate America,Kane wrote. Debt backed by shipping containers is valued from 90cents to 95 cents on the dollar, the analysts wrote.Aircraft-linked securities range from about 76 cents to 91cents.

“These off-the-run sectors require in-depth analysis, yet theattractive return is worth the extra effort,” they wrote.

Wells Fargo's recommendations for 2012 include debt backed bytimeshare payments and fleets of rental cars, according to a Dec. 6report from analysts led by John McElravey in Charlotte, NorthCarolina.

A disadvantage of esoteric bonds for investors is that they canbe hard to sell because they don't trade frequently. As a result,investors require the additional yield, said Barclays Capital'sWishengrad.

Miramax cut the size of its December sale of bonds backed by alibrary of more than 700 films and 14 television series asinvestors demanded higher yields, Bloomberg data show. The producerof films such as “Shakespeare in Love” reduced the offering by $50million to $500 million.

Credit Card Bonds

The offering by Miramax Film NY LLC included $350 million ofBBB-rated debt that yielded 6.3 percent, according to a personfamiliar with the deal.

The market for esoteric bonds is set to grow from $31 billion in2011 even as some segments, such as credit-card debt, shrink,Credit Suisse analysts led by Chandrajit Bhattacharya wrote in aDec. 7 report.

Credit-card bond sales have plunged as banks turn to depositsfor funding, with $19 billion of the debt issued during the pasttwo years, compared with $47 billion in 2009, Bloomberg datashow.

“The importance of esoteric ABS has been growing in the primarymarket as the search for higher-yielding assets continues andsupply from other traditional ABS sectors remains tepid at best,”the Credit Suisse analysts wrote.

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