The U.S. ABS primary market priced a trim $7 billion in the holiday shortened week. Last week's hawkish statement by the Federal Open Market Committee and a mild case of the summer doldrums may have conspired to keep the ABS market in decline for the second week in a row. But as the ABS market simmered, tensions raged overseas as rioters protested the G-8 summit and the week ended in tragedy for many Londoners as explosions rocked the city's citizenry.
Credit card and automobile deals were noticeably absent from the undersized issuance calendar, but three student loan deals, a timeshare deal and a small business loan deal were mixed in among the usual spate of real estate deals.
The largest deal in the market was a $1.2 billion deal from Option One Mortgage and led by Banc of America Securities and RBS Greenwich Capital. The one-year tranche of the deal priced at 10 basis points over one-month Libor, while the two-year tranche priced at 16 basis points over one-month Libor, both on the inner rim of price guidance. The 3.5-year tranche priced at 35 basis points over one-month Libor, one-to-two basis points tight of guidance.
The final home equity deal to price was a $307.6 million Popular ABS Mortgage Pass-Through Trust home equity deal via joint leads Friedman Billings Ramsey and RBS Greenwich. The one-year tranche of the deal priced at 11 basis points over one-month Libor, while the two-year tranche of the deal priced at 35 basis points over swaps, the three-year at 40 basis points over swaps and the five-year at 60 basis points over swaps, all in-line with guidance.
There was a healthy dose of home equity paper that had yet to price as of press time. A $956 million home equity deal from Bear Stearns was still on the table, with the one-year tranche talked in the 10 to 11 basis point area and the seven-year tranche talked in the 38 to 40 basis point area. First-time issuer Silverleaf Resorts, Inc. announced a $135.8 million deal led by UBS and expected to price sometime next week, with no guidance as of press time. The deal was still road-showing as of press time last week.
Fremont Mortgage had a home equity deal on the table via RBS Greenwich totaling $878 million, with no guidance released as of press time. First Franklin Mortgage was poised to price a $728.7 million home equity deal led by Goldman Sachs. The two-year tranche of the deal was being talked in the 27 basis point area over one-month Libor, while the five-year M1 tranche was being talked in the 50 basis point area over one-month Libor.
Ownit Mortgage Solutions had a $687 million subprime MBS deal, that had yet to price, led by Merrill Lynch. The one-year tranche of the deal was being talked in the 10 basis point area over one-month Libor, while the six-year tranche was being talked in the 45 basis point area over one-month Libor.
In the student loan sector, South Carolina Student Loan Corp. priced a $700 million Federal Family Education Loan Program deal led by RBC Dain Rauscher. The seven-year tranche priced at 10 basis points over three-month Libor, the 9.25-year tranche priced at 12 basis points over three-month Libor and the 12-year tranche priced at 14 basis points over three month Libor, all in-line with guidance.
The Pennsylvania Higher Education Assistance Agency priced a $400 million student loan deal backed by FFELP collateral via lead manager Citigroup Global Markets. The three-year tranche of the deal priced at one basis point over three-month Libor, one point tight to guidance. The 11-year tranche of the deal priced on top of guidance at 12 basis points over three-month Libor, and the twelve-year tranche of the deal priced at 38 basis points over three month Libor.
Iowa Student Loan Corp. had a $700 million deal left on the table as of Thursday's market close. The deal, led by UBS, had its 2.78-year tranche was being talked in the three basis point area over three-month Libor, with the 6.88-year tranche being talked at 11 to 12 basis points over Libor, and the 14.2-year tranche being talked in the 17 basis point area over three-month Libor. The double-A rated B-tranche, with a 14-year average life, was being talked in the mid-30 basis point area over Libor.
Finally, Grand Pacific Holdings Corp. priced a $218 million deal backed by business loans led by Wachovia Securities. The 4.62-year tranche of the deal priced at 37 basis points over one-month Libor, on the wide end of guidance, and the same-duration single-A rated B-tranche priced at 75 basis points over one-month Libor, ten basis points wide of guidance.
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