Fueled by active issuance from the consumer sector, and despite a slow early start, the ABS market raced toward a week of $20 billion in primary issuance.
Although the market was quiet on Monday, as no deals priced, but by Thursday afternoon, some $15 billion in ABS paper had cleared traders' desks.
Deals secured by insurance premium receivables made definite impressions on the market. J.G. Wentworth Receivables, Series 2006-3, came to the market midweek. Rated triple-A throughout, its notes were split into a seven-year tranche that priced at 20 basis points over the one-month Libor, an a 17.1-year piece that will pay investors a fixed 5.60% rate for the duration. The $300 million Insurance Note Capital Term deal came to market via Lehman Brothers. Also rated triple-A, the transaction came in at 24 basis points over the one-month Libor.
Among credit cards, the $970 million GE Capital Credit Card Master Note Trust came to market via Banc of America Securities, and got pricing at one basis point below swaps for its triple-A piece.
The Long Beach Auto Receivables Trust priced a $500 million transaction. Part of the deal was sold into the asset-backed commercial paper market. The nearly one-year piece priced flat to the EDSF, while the 3.43-year piece came in at 10 basis points over swaps.
Among the consumer sectors, home equity loans and student loans dropped several whopping deals onto the market. Countrywide Securities brought its $1.6 billion Countrywide Asset-Backed Securities deal to market, with its one-year tranche pricing at five basis points over one-month Libor. Investors on the 4.66-year end of the deal picked up significant spread, at 600 basis points over the benchmark. The week was not over for Countrywide, as by press time it expected to price another $1.4 billion of paper backed by home equity loans.
Also, First Franklin Mortgage Loan Asset-Backed Certificates priced a $1.5 billion transaction priced off of the one-month Libor. Lehman Brothers and National City acted as co-lead managers on that transaction. The nearly one-year piece came in at five basis points over the benchmark, while the 4.10-year tranche priced at 500 basis points over.
Student loan provider Sallie Mae brought a $1.2 billion deal to the market through its SLM Student Loan Trust and via lead managers Deutsche Bank, Merrill Lynch and Morgan Stanley. Backed by high-quality paper, none of which received anything below a single-A rating, the deal achieved pricing at one basis point over the three-month Libor on the 2.5-year piece. On the longer end of the deal, the 11.5-year tranche, pricing came in at 31 basis points over the benchmark.
At press time, Wachovia Auto Loan Owner Trust was in the market with a $1 billion auto loan deal. Pricing was expected to be in the area of one point below the four-month Libor on the short-term piece, which was also being marketed to the ABCP market. First Franklin was another home equity ABS issuer prepping two deals for the market last week. By Friday, it hoped to price another $2 billion in paper.
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