Automaker Nissan (NSANY) is expected to sell $1.5 billion of bonds backed by auto receivables on Thursday, making it potentially the first offering eligible for the Federal Reserve's program aimed at jump starting consumer lending.

The bulk of the deal, called NAROT 2009-A, carries top triple-A ratings, meaning that investors will be able to borrow funds from the Fed's Term Asset-Backed Securities Loan Facility, known as TALF, to invest in this bond offering.

Banc of America Securities and JP Morgan are the joint leads on the deal.

The Fed's $200 billion program, for which the central bank began accepting applications Tuesday, was set up specifically to encourage issuance in the market for consumer loan-backed securities. This market dried up during the financial upheaval that began last fall.

The application deadline for the first round of financing through TALF is Thursday, with disbursement funds due March 25.

Market participants expect more bond issuers to follow Nissan. Auto lender World Omni Financial Corp. and Ford Motor Co.'s Ford Motor Credit Co. are likely to issue deals that would be eligible for the program.

"We expect a rush of consumer asset-backed securities' issuance and investors lining up with financing," said Darrell Wheeler, head of securitization research at Citigroup. "Financing for buying safe assets is a compelling investment."

Under the Fed's program, a company could use $1 million of its own money and get a $9 million loan from the Fed to buy $10 million of asset-backed securities. If the bond's value rises to $11 million, the investor gets to keep the profit but if it falls below $9 million, the investor would lose only the initial $1 million.

The TALF has taken a long time to get off the ground and is one of several programs initiated by the Fed to help stabilize financial markets and stimulate lending.

Price guidance on the Nissan deal has already circulated, according to a person familiar with the deal. The $357 million 0.32 year tranche is expected to yield 40 basis points over a short-term benchmark.

The $323 million 0.99-year portion is expected at 185 to 200 basis points over short-term futures benchmark. The $493 million 1.98 year portion is expected at 200 to 215 basis and the $196 million 3.16 year part in the 325 to 350 basis points over interest rate swaps.

 
   -By Anusha Shrivastava, Dow Jones Newswires; 201-938-2371; anusha.shrivastava@dowjones.com

(Liz Rappaport of The Wall Street Journal contributed to this report)