New-issue ABS volume soared last week, with $16 billion having priced and up to $2 billion left in the pipeline for this week. The auto sector led the way last week, pricing over $7 billion of supply split among loan, lease and floorplan receivables. There were also credit card, global MBS, student loan-backed deals to go with the standard flow of mortgage-related transactions, which totaled roughly $5.5 billion.

Most of the auto supply was snapped up quickly by investors after being in the market for only a day or two. Represented were foreign captives with prime collateral, domestic independents with non-prime collateral and a heavy-duty commercial truck loan offering. One offering, however, felt the wrath of investors, who, rightly so or not, are fully aware of credit risk in ABS.

Mitsubishi Motor Credit's first-ever foray into the floorplan sector proved a rude awakening, as the $290 million offering was ill-timed - with Standard & Poor's cutting the issuer's unsecured debt rating specifically due to lagging U.S. sales to single-B plus from double-B minus - while the deal had been marketing for a about a day. To lead manager Deutsche Bank Securities' credit, the deal stayed in the market, pricing at 40 basis points over one-month Libor, 10-plus wider than initial guidance in the high 20 basis point area over Libor.

The second offering of the year from Volkswagen AG, $1.3 billion of 2003-2 notes via ABN Amro and Barclays Capital hit early, while American Honda's $1.8 billion series 2003-4 deal, via Credit Suisse First Boston and JPMorgan Securities, came late, but both went quickly.

Volkswagen priced its one-year A2 fixed-rate class to yield five basis points over EDSF, with its two-year A3 priced at eight basis points over swaps and its three-year A4s priced at six basis points over swaps.

Honda's fourth offering of the year, pricing two days later, cleared its one-year notes at six basis points over EDSF, while its A3 notes, with a shorter-than-usual 1.9-year average life, priced at seven basis points over EDSF. The three-year A4 notes, meanwhile, priced at six basis points over swaps.

Staying with foreign captives, Nissan Motor offered its first lease ABS of the year as part of its annual lease issuance plan. Led by JPMorgan, Nissan priced its one-year fixed-rate A1 at 15 basis points over EDSF, versus guidance in the mid-to-high teen area. The two-year floating A3 notes, which were sized according to demand, priced at 14 basis points over one-month Libor, while the fixed A4 class came at 27 basis points over swaps.

Ford Motor Credit's subprime lending unit Triad Financial completed its first ABS since March, selling $932 million of 2003-B notes via Citigroup Global Markets. Backed by a full MBIA wrap, one-year A2 notes priced at 14 basis points over EDSF, with two-year A3 and three-year A4 notes pricing at 29 and 34 basis points over swaps.

Former Circuit City unit CarMax Inc. sold $600 million of series 2003-2 notes via Banc of America Securities and Wachovia Securities. As a relatively high-quality lender, CarMax bested Triad on a spread basis, pricing one-year notes at 10 basis points over EDSF and its two- and three-year seniors at 15 and 20 basis points over swaps.

Late in the week, Onyx Acceptance sold $400 million of auto loan paper via Merrill Lynch, backed by a full XLCA wrap, while Navistar International, makers of International 18-wheelers, also sold $498 million of truck-loan notes via JPMorgan.

Capital One Financial priced $250 million of triple-B notes via Barclays and Deutsche Bank. The seven-year fixed-rate subs priced at 185 basis points over swaps, to yield 6.08%. Chase Manhattan Bank introduced a $1.5 billion five-year floater late in the week, which was seen quickly pricing Friday.

A pair of global Australian MBS made the rounds last week, as Interstar Millennium's long awaited $716 million 2003-5G and $1.03 billion from the ARMS II shelf battled it out. Interstar's three-year triple-A class priced at 25 basis points over three-month Libor. ARMS II, meanwhile, was shopping its three-year triple-As in the 20 basis point area over three-month Libor, although it had yet to price as of press time.

Sallie Mae had its eleventh FFELP-guaranteed student loan ABS of the year via BofA, Merrill and Morgan Stanley. The three-year floating-rate A2 class priced at five basis points over three-month Libor, while the three-year fixed-rate A5 priced at nine basis points over swaps. The five-year floating-rate A3 class priced at 12 basis points over three-month Libor and its comparable fixed-rate A7 priced 15 basis points over swaps.

The mortgage sector, which had $5.5 billion circulated throughout the week, saw $3.25 billion price, with the remainder seen slipping into this week's book of business. Among deals to be completed was $1.25 billion from GMAC-RFC's RAMP shelf via Bear Stearns. Countrywide Home Loans Inc. quietly sold $490 million of closed-end second lien ABS and CSFB's ABSHE shelf priced $750 million of New Century Financial-backed notes, which were acquired in the whole loan market.

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