The first real week of trading in the third quarter showed promise, with over $6.1 billion pricing in home equity focused primary trading. With the exception of four offerings totaling $2.1 billion, the remainder of the supply throughout the week was mortgage-related product, but most of the home equity supply came from banks own issuance vehicles, as units of Credit Suisse First Boston, Lehman Brothers, JPMorgan and Morgan Stanley all shopped deals.

The credit card sector had descent issuance last week, with $1.7 billion pricing from American Express, Advanta Corp. and a little used vehicle of Circuit City Stores Inc. The auto loan sector saw one new issue price, from non-prime lender Onyx Acceptance.

With spreads more or less unable to push through the tight levels already established over recent months American Express priced a three-year credit card offering at the tightest level the floating-rate sector has seen to date. Am Ex also priced a seven-year deal nearing the tightest levels seen this year.

The four basis point print over one-month Libor for three-year triple-As was the tightest the sector has seen since Feb. 1, when Citibank sold three-year paper at three basis points over three-month Libor. The 17 basis point spread for the seven-year seniors tied for the tightest print of the year with the May 23 pricing of Chase credit card paper.

American Express Credit Account Master Trust 2002-4 and 2002-5 were driven by strong overseas demand, noted Bill Haley, vice president in the N.A. Asset Backed group at JPMorgan, which led both transactions. Roughly one-third of the three-year 02-4 and 60% of the 02-5 supply from JPMorgan's allocations went to European accounts, Haley said. Both transactions were "comfortably" oversubscribed with over 12 accounts on each of the four offered tranches.

With its second home equity offering of the year, Chase Funding pushed the inner limits of the sector. The levels CFLAT 2002-2 achieved, however, were at the tight thresholds that the sector saw pre-Sept 11. More notably, demand for double- and single-A notes has increased, as former triple-A buyers have begun looking down in credit.

The $1.09 billion deal, also led by JPMorgan, saw all tranches price in line to tighter versus initial guidance. The 2.5-year triple-A floater priced with a coupon of 25 basis points over one-month Libor, inside the levels seen for recent self-led deals from Deutsche Bank or Lehman Brothers. "We made a run at getting to 24 (over Libor), but could not crack it," said Chris Schiavone, vice president and new head of home equity underwriting at JPMorgan.

Also tapping the home equity sector, Lehman's Arc Trust priced $660 million of leftover supply from the previous week and MSDW Capital was set to price $612 million of 2002-HE2 notes, backed by loans originated by Aames Financial (79%) and IndyMac (21%).

For the first time since November 1998, Circuit City unit First North American National Bank brought an all Visa/MasterCard-backed credit card deal. The five-year floater, backed by a full Ambac wrap, priced its triple-As at 32 basis points over one-month Libor. Banc of America Securities was lead manager for the offering.

Staying in cards, Advanta brought its annual small business credit card-backed offering. The Barclays Capital-led deal, totaling $300 million, is a pool of cards that while backed implicitly by the business, the onus is ultimately on the individual to pay. The three-year triple-A class priced at 20 basis points over one-month Libor, inside of the high 20 area released initially as price guidance. The triple-B class however, widened to price at 175 over one-month Libor, versus guidance in the 165 basis point area over Libor.

Onyx Acceptance brought a $450 million non-prime auto loan deal via Credit Suisse First Boston, featuring all fixed-rate tranches and backed by a full MBIA wrap. The strongest demand within the deal was for one-year supply, which saw oversubscription rates hit 200% for one-year paper offered at 12 basis points over EDSF.

In the growing foreign MBS market, InterStar Millennium Global Trust completed its $1 billion global offering of Australian mortgage-backed securities, via Barclays Capital. The single-tranche offering cleared at 18 basis points over three-month Libor, a touch outside of the 16-17 basis points over at which previous deals this year had cleared.

Looking ahead to this week, DaimlerChrysler N.A. is seen with a $1.5 billion auto loan deal via Banc One Capital Markets and Salomon Smith Barney. As of Press time, little was available other than the DCAT 2002-B deal would be all fixed-rate. Also, CSFB Mortgage Loan Trust 2002-HI23, backed by 116.67% LTV loans, had marketed last week but was scheduled for a restructuring and was expected to price this week.

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