The U.S. ABS primary market priced over $18 billion last week as the auto and credit card sectors carried a palette of deals. The big stories of the week were General Motors Corp.'s announcement that it will cut 25,000 workers by 2008, and Federal Reserve Chairman Alan Greenspan's forecast for the U.S. economy.

The bulging week of issuance was characterized by the strong demand and quick deal turnaround that have become hallmarks of the ABS market recently. "We are continuing to see good, strong demand here," said one ABS research head. "Deals are getting upsized, deals are getting priced quickly and market fundamentals continue to be robust. It's as good as it gets," he quipped.

The auto sector was the stand-out sector for the week, as Ford Motor Credit priced its first dealer floorplan deal since it was downgraded to below investment-grade status by Standard & Poor's in May. Meanwhile, American Honda Finance Co. and Chase Manhattan Bank, N.A. priced a combined $3.5 billion at tight spreads for the sector.

The Ford deal, backed by wholesale dealer floorplan loans, was upsized to $2.3 billion from $2 billion and priced on top of guidance at 15 basis points over one-month Libor for the triple-A notes. Three-way joint leads on the transaction were ABN AMRO, Barclays Capital and Credit Suisse First Boston. Though it did price on top of guidance, the deal was well outside Ford's previous floorplan deal, as was expected after the ratings cut.

Chase priced a $2.2 billion deal that priced flat to EDSF and swaps for its one- and two-year tranches respectively, the two year pricing one basis point inside guidance and up to two basis points inside industry average spreads for the week. The four-year tranche priced at four basis points over swaps.

Honda priced a $1.3 billion series 2005-C deal led by Citigroup Global Markets and CSFB. Spreads on the deal also vastly undercut industry averages, coming in at a slim one basis point under EDSF and flat to swaps for the one- and two-year tranches respectively. The 3.58-year tranche priced at five basis points over swaps.

Two nonprime auto deals were still on the table as of last Thursday. One was a $350 million deal from Drive Financial Services and the other a $350 million deal from Long Beach Acceptance Corp.

The credit card sector was active in terms of deals, but not necessarily in volume as Barclays priced the largest deal of the week in the sector at $1.5 billion. The three-year deal priced one basis point over one-month Libor for the A tranche, on top of guidance. MBNA America Bank brought a $600 million deal to market, led by Banc of America Securities and Merrill Lynch. The five-year deal priced on top of guidance at three basis points over swaps. A pair of deals from American Express - totaling $600 million - with three- and seven-year average lives, were late-week additions to the calendar

Two single-A rated credit card deals snuck into the market as well, with Capital One Financial pricing a $300 million, 5.3-year floater flat toone month Libor via Morgan Stanley. MBNA also had a $100 million floater in the market, a seven-year non-prime deal led by Lehman Brothers that priced at 29 basis points over one-month Libor.

The student loan sector was also represented with a $2 billion deal from College Loan Corp. led by Citigroup. The deal was backed by FFELP collateral and had yet to price as of press time.

Leading the home equity charge with a $1.4 billion subprime MBS deal was Morgan Stanley. The one-year tranche of the deal priced on top of guidance at nine basis points over one-month Libor, the three-year tranche at 24 basis points over one-month Libor and on the outer rim of guidance in the 23 basis points to 24 basis points range.

Centex Corp. priced a $1 billion, fixed- and floating-rate home equity deal led by Banc of America Securities. The fixed-rate portion of the deal priced 16 basis points over EDSF and the three-year tranche priced 25 basis points over swaps. For the floating-rate portion, the one-year tranche priced nine basis points over one-month Libor, the two-year tranche at 15 basis points over, and the 3.55-year at 23 basis points over Libor.

Meritage Mortgage priced a $646.7 million deal led by RBS Greenwich Capital. The one-year tranche of the deal priced 12 basis points over one month Libor and the 2.5-year tranche priced 24 basis points over one-month Libor. Countrywide Home Loans, Inc. priced an $800 million deal with a 0.8-year tranche priced at eight basis points over one-month Libor and a 2.5-year tranche priced at 23 basis points over one-month Libor, both flat to guidance.

Aegis Mortgage Corp. and AmeriQuest Mortgage Co. both announced home equity deals but had yet to price them as of press time. The Aegis deal is $830 million and is expected to price in the nine to 10 basis points over one-month Libor area for the one-year tranche and 24 basis points over one-month Libor for the three-year tranche. The Ameriquest deal is $400 million and is expected to price in the eight to nine basis points over one-month Libor area for the one-year tranche, and in the 23 to 24 basis points over Libor area for the three-year tranche. There was also a $358 million deal from Irwin Mortgage Corp. on the table as Thursday drew to a close.

In off-the-run sectors, two deals had yet to price as of press time. One was a $654 million deal from General Electric Co. talked in the one to two basis points over EDSF area for the one-year tranche. The other was a six-year $250 million small business loan deal from Business Loan Express expected to price in the high-20 basis point area over one month Libor area.

(c) 2005 Asset Securitization Report and SourceMedia, Inc. All Rights Reserved.

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