Supply continued to hit the U.S. ABS market last week, pricing eight new issues for a total of more than $6.5 billion. Option One Mortgage, American Honda Finance and Capital One each circled large offerings, proving that in these troubled times the top names in the market have little trouble getting solid execution, while second-tier issuers The Metris Companies, PHH Corp. and Conseco all marketed smaller deals.

The auto loan sector showed continued strength, as Honda was the latest top-tier issuer to bring a deal to quality-seeking investors, with a $1.8 billion deal. The captive finance company brought the first completely fixed-rate offering since the Sept. 11 attacks to what was dubbed "surprisingly robust demand."

The series 2001-3 deal priced in line with initial guidance to yield two basis points under four-month Libor in the money market tranche, 18 basis points over EDSF for the one-year A2 class, 23 basis points over EDSF in the 1.9-year A3 and 18 basis points over swaps for the 2.93-year A4 tranche.

According to Brad Dansker, vice president in lead manager JP Morgan's North American ABS group, each of the classes was two times oversold before going subject. "The success of the issue shows that, in these times of uncertainty, the super-prime names, like Honda, continue to attract strong investor demand." More telling is the fact that despite general credit concerns, Honda had its triple-A credit enhancement levels cut to 3% from 3.25%, Dansker added.

Option One Mortgage sold a total of $2.9 billion of conforming and non-conforming home equity loan-backed paper through joint lead managers Banc of America Securities and Greenwich Capital Markets. The offering featured a $2.54 billion FSPC Freddie Mac-wrapped T-36 series paper, with a 3.12-year average life, which priced at 15 basis points over one-month Libor. Also, $409.5 million of un-wrapped 2.84-year senior notes priced at 30 basis points over one-month Libor.

In the credit card sector, Capital One sold $1 billion of three-year notes through Lehman Brothers and Barclays Capital jointly. The seventh securitization of the year for the issuer saw strong demand leading to an increase in the deal's size from the initial $750 million. The senior $845 million three-year fixed-rate A class priced to yield 3.979%, or 14 basis points over comparable swaps.

However, not all issuers are seeing such strong demand for their paper. Middle-tier issuers in the market are seeing drawn out premarketing periods and spread widening for deals prior to pricing.

For example, credit card issuer Metris was in the market with a floating-rate offering through Deutsche Banc, that competed with Capital One for attention in the three-year part of the curve and lost. The series 2001-4 offering saw its $372.9 million senior tranche widen from initial guidance in the low 30 basis point area to price at 35 basis points over. The single-A rated B tranche, initially talked in the 115 to 125 basis point range, priced at 140 basis points over.

PHH Corp. vehicle Greyhound Funding LLC was marketing throughout the week $750 million of corporate fleet lease-backed notes through JPMorgan and First Union. The deal, initially registered with the Securities & Exchange Commission in June of 2000, mulled around the market all week and had yet to price as of press time. Sources close to the offering blamed the SPV name for causing some trepidation among investors.

"This deal has nothing to do with busses, but with (the recent crash) investors hear the name and get scared," according to a source close to the deal.

The series 2001-1 issue offered investors $425 million of two-year and $325 million of three-year floaters, talked in the 25 and 30 basis point areas over one-month Libor, respectively.

Scheduled for late last week to early this week, Conseco had a $539 million home equity loan-backed deal in the market via Lehman Brothers. The series 2001-D offering features a pair of $93.5 million senior classes, one fixed- and one floating-rate, each with 0.95-year average lives. The triple-A rated floating-rate A1A class was talked in the 23 basis point area over one-month Libor and the A1B fixed-rate class was talked in the 70 basis point area versus swaps.

In the coming week, look for Reliant Energy to return to the market with its $750 million stranded cost securitization, initially scheduled to price Sept. 11. Lead manager Merrill Lynch was running an investor conference call scheduled for last Friday in order to determine new indicative levels for the four-tranche, fixed-rate paper.

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