The U.S. ABS primary market sprang back to life last week, following two comparably slow weeks of issuance. New-issue supply in the market totaled over $19 billion, with $13 billion having priced as of Thursday's market close, with the remaining $6 billion seen bleeding into this week. After lagging for most of the year, auto deals are making a late push in the fourth quarter with another strong week of supply. Home equities, meanwhile, priced $5.8 billion of the $11 billion total shopped around, boosted by a pair of $3 billion-plus transactions.
With a strong showing in October, auto ABS supply has spiked in the fourth quarter, with offerings from foreign captives and regional independents leading the way. Last week, BMW Motor Co. and Nissan Motor Credit, each saw strong demand for their respective offerings, as did domestic lenders Capital One Financial, WFS Financial and DriveTime Credit. Regional banks Marshall & Ilsley and Regions Financial each priced deals and Avis Group Holdings was set to price its second pre-enhanced Chesapeake Funding issuance vehicle.
BMW's second-ever floorplan ABS priced its $500 million three-year triple-A notes at five basis points over one-month Libor, with the double-A rated subs pricing at 20 basis points over. The Deutsche Bank Securities-led deal saw typically strong demand, thanks in part to the higher-than average 65.2% monthly-payment rate.
Nissan, which sold a lease ABS in October, came back last week with its third loan deal of the year, a $1.85 billion fixed-rate offering via Morgan Stanley. One-year A2 notes priced to yield six basis points over EDSF, while 1.85-year A3 notes priced at seven basis points over EDSF.
Capital One's non-prime COAFT shelf saw extremely strong demand from investors, presenting further evidence of renewed appetite for the name. Led by Lehman Brothers and Wachovia Securities, the MBIA-wrapped offering priced two basis points inside of guidance levels, following an increase in size to $1 billion, from $750 million.
WFS Financial brought $1.4 billion of fixed-rate notes via DBSI, pricing largely in line with expectations. The exception was down in credit, as the triple-B rated D class priced at 170 basis points over EDSF, five tighter than preliminary price talk.
Wisconsin-based Marshall & Ilsley priced its first ABS of the year, with an $850 million fixed-rate transaction via Credit Suisse First Boston. M&I's two-year A3s priced at 10 over swaps, in line with talk and its 3.14-year A4s priced at nine basis points over swaps, one inside of guidance.
Alabama's Regions Acceptance sold $634 million of prime paper, via JPMorgan Securities and Regions sister company Morgan Keegan. Despite the strength of Regions corporate parent, and the presence of World Omni Financial as master servicer, Regions priced two to three basis points outside of M&I for triple-A rated securities.
Late in the week, Avis announced its second Chesapeake Funding rental fleet lease ABS, enhanced by the $377 million in subordinated notes from the Terrapin Funding deal, which priced in July. Chesapeake's 2003-2 offering, led by Banc of America Securities and JPMorgan, was being marketed in the 22 basis point area over one-month Libor for 2.14-year A1 and in the low 30 basis point area for 3.37-year A2 notes.
Just one credit card deal made the rounds last week, a $500 million floater from First National Bank of Omaha through Banc One Capital Markets. FNB's three-year senior floaters priced at 11 basis points over one-month Libor, versus guidance in the nine to 10 basis point area over. Fixed-rate single-A and triple-B rated subs priced to yield 30 and 93 basis points over swaps, respectively.
Just three home equity transactions priced last week, although there were another four marketing. Countrywide Home Loans brought a mammoth $3.5 billion fixed- and floating-rate deal that tightened across the board, despite its size. Subordinated notes priced 20 to 25 basis points inside of guidance, with triple-B minus classes pricing at 675 basis points over both Libor and swaps.
AmeriQuest Mortgage, which is making a push as leading ABS issuer, had a pair of offerings last week, from separate shelves. The larger, $1.9 billion AMSI 2003-11 priced early in the week via BofA and RBS Greenwich, while $731 million of wholesale-origination Argent shelf was seen pricing late last week. The ARSI 2003-W8 offering, its third since Oct 24, totaled roughly $3 billion. Year-to-date, $9.8 billion of Argent paper has hit the market, off both the ARSI and AMSI trusts, while the standard AmeriQuest originations have totaled $13 billion.
Halifax plc's Permanent Financing No. 3 was on a roadshow throughout last week, with Citigroup Global Markets, CSFB and UBS taking turns giving presentations around the world for the planned $5 billion ($3.7 billion U.S.) global U.K. MBS. The nine-tranche deal, with average lives out to 4.8-years, is seen pricing this week.
Additionally Sallie Mae surfaced late last week with a $2.5 billion student loan ABS, its fifteenth of the year. Full details had yet to emerge as of press time, however.
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