Bank AG, Europe's second largest bank, plans to sell $1.3 billion in securities backed by boat and recreational vehicle loans as early as this quarter, according to a company official.

Deutsche Financial is aiming to sell the securities in two fixed-rate transactions. The larger will consist of $850 million of loans on recreational vehicle, known as RVs, and the second will comprise $450 million of boat loans, according to Roger Kirwan, president of the consumer finance group at Deutsche Financial.

The size of the Deutsche Financial offerings means the company will make its presence felt in the market for marine- and RV-backed securities. The marine-backed market totals about $14 billion at present, while the RV market is about the same, Kirwan said.

The collateral on the loans is "extremely high quality,'' said Kirwan, adding that people buying RVs and boats are "buying because they love them and they pay for them.'' The sale will likely come this quarter if the financial markets stabilise and spreads -- the difference in yield in asset-backed and US Treasuries -- improve, he said. Asset-backed spreads have ballooned over the last two months as turmoil on world financial markets spurred a flight into Treasuries and drove Treasury yields to 30-year lows.

Kirwan was a panellist at Bermuda's conference on asset-backed securities sponsored by Frank J. Fabozzi Inc. and Information Management Network Inc.