As anticipated, Capital One Financial Corp. unveiled last week the inaugural pre-enhancing, subordinated credit card-backed issuance vehicle, dubbed "COMET" (Capital One Multi-Asset Execution Trust). Carefully gauging investor interest, lead manager Salomon Smith Barney is being flexible with the structure, allowing demand to drive tranche sizes and tenor.

As reported in last week's ASR (p. 4), the issuer would likely offer single-A and triple-B rated notes either at the three- or five-year part of the curve. As it turns out Cap One is offering all of the above, a minimum of $150 million of either three- or five-year single-As and a minimum of $150 million of either three- or five-year triple-Bs. As of press time, sources indicated demand for the single-As was strongest for the three-year notes while investor's favored five-year paper down in credit.

Unless Cap One is able to muster enough demand to increase its sub offerings to $250 million, it will be missing out on one of the main attractions of the master note trust structure to the buyside - the added liquidity that comes with index eligibility.

Preliminary price guidance for the single-As was set at 80-90 basis points over one-month Libor for three-year paper and 95-105 basis points over one-month Libor for five-year supply. For triple-Bs indicative levels were set at 200-225 basis points over one-month Libor for three-year and 225-250 basis points over one-month Libor for five-year notes.

As of Thursday, the schedule was for tranche sizes and allocations to be decided upon early this week (Sept. 23), with the sub bonds pricing by mid-week. The first pre-enhanced triple-A rated seniors should be announced this week, with a late-next-week pricing target. Settlement is scheduled for Oct. 10.

Co-managers for the single-A rated B tranche are Banc of America Securities, Deutsche Bank Securities, JPMorgan Securities and Wachovia Securities. For the triple-B rated Cs are Barclays Capital, Banc One Capital Markets, Credit Suisse First Boston and Lehman Brothers.

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