S A well-bid and fast-paced session of primary supply was seen in the U.S. ABS market last week. Bolstered by a massive global RMBS deal, which accounted for roughly half of the volume, the market saw $21.5 billion of new-issue ABS price, with a multitude of asset classes represented.

The completion of the $11.5 billion U.K. mortgage securitization from HBOs plc, of which $6.1 billion was denominated in U.S. dollars, lifted a heavy weight from the market. The Permanent Financing No. 4 deal, increased in size several times prior to pricing, was jointly led by Citigroup Global Markets, Morgan Stanley and UBS. The second of three large transactions slated to come out of the U.K. in this quarter, the market now awaits Holmes Financing No. 8.

Also in foreign MBS, Interstar Millennium quickly sold $1.06 billion of Australian MBS via Barclays Capital and JPMorgan Securities, with just one dollar-denominated tranche offered in the U.S.

The $1 billion A class, with a 2.97-year average life, priced at 20 basis points over three-month Libor. Ahead, Commonwealth Bank of Australia's Medallion Trust is set to issue $1.5 billion.

In home equity issuance, a lack of multibillion-dollar transactions led to supply totaling just $4 billion last week. The standard names were seen throughout the week, including AmeriQuest Mortgage's Argent unit, Countrywide Home Loans Inc., GMAC-RFC and Long Beach Mortgage. The largest offering, however, came from NovaStar Mortgage, which sold $1.7 billion of notes via RBS Greenwich Capital and Wachovia Securities.

While demand for triple-A home equity remained strong, sources reported a softening for subordinated HEL bonds, particularly triple-B minus bonds, which saw clearing levels settle in last week just inside of 300 basis points over one-month Libor.

While Argent's 2004-W4 triple-Bs priced right at 300 basis points versus Libor, Countrywide's 2004-BC2 triple-B minus class priced at 290 basis points over Libor. NovaStar priced its triple-B minus class at 295 basis points over Libor. First Franklin Mortgage, meanwhile, which had yet to price up its $788 million 2004-FFH1 deal, was marketing its M9 class bonds in the 285 to 300 basis point range over Libor.

The credit card sector had one of its most active weeks of the year, pricing $1.45 billion, as four of the leading issuers all came to market. Sector benchmarks were set with the Gracechurch Funding No. 6 securitization of BarclayCard receivables. The triple-A three-year bonds priced at three basis points over one-month Libor, while the single-As priced at 19 basis points, and the triple-Bs priced at 45 basis points.

MBNA America Bank completed a $200 million seven-year triple-B through lead managers Deutsche Bank Securities and JPMorgan at 78 basis points over one-month Libor. Capital One Financial sold single-A rated three-year paper at 22 basis points over one-month Libor via Credit Suisse First Boston. The biggest deal was the $1.25 billion reopening of a three-year triple-A Citibank N.A. deal that priced mid-January at a level two basis points inside the original spread - with a yield flat to swaps. All told, Citibank's CCIT 2004-A1 now totals $2.75 billion.

A pair of auto lenders priced deals last week, following the relative spate of auto ABS supply in February. While spreads for Chase Manhattan Bank's $1.6 billion series 2004-A deal cleared in line with its peer group, softer demand for three-year paper was reported. One- and two-year spreads priced to yield two basis points over EDSF and swaps, respectively, with three-year spreads clearing at three basis points over swaps.

In non-prime collateral, DriveTime Auto sold $133 million of loan-backed notes wrapped by XLCA via RBS Greenwich as lead manager. The former ugly duckling saw its best spreads ever, pricing its 2a7 eligible money market class flat to three-month Libor, its one-year notes at 25 basis points over EDSF and its 2.16-year class at 30 basis points over swaps.

The equipment lease sector had its second securitization of the year last week, with The CIT Group pricing $936 million of office equipment lease-backed notes via Banc of America Securities and Deutsche Bank. Spreads for two- and three-year triple-As within the series 2004-VT1 deal priced at 13 and 14 basis points over swaps, respectively.


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