Largely on the strength of consumer ABS assets, the securitization market slowly cranked out several more transactions last week. Also, while some traders reported better demand across the credit spectrum for ABS paper, a trend developing in both the secondary and primary markets, most expected deal volume to slow down considerably as the third quarter comes to a close.

"I think people got what they needed done for the quarter's end," said one trader. "Next week is an early close on Friday, [which is when] you could see some opportunistic credit card issuance. But it will be quiet for the rest of this week and next week."

As for those consumer ABS sectors, the Capital One Multi-Asset Execution Trust, 2007-7 priced a $1 billion deal via ABN Amro and Citigroup Global Markets. The 10-year notes, secured by credit card receivables, came in at about Libor plus 59 basis points. Market sources familiar with the deal say Citigroup conceded very little on the spreads, whose guidance was quoted in the low-50-basis-point area while the deal was being marketed.

The market also saw an issuance from USAA Auto Owner Trust. Valued at $1.3 billion, the series 2007-2 transaction was managed by Deutsche Bank Securities and JPMorgan Securities. Barclays Capital, HSBC Securities and Lehman Brothers all acted as co-managers on the deal, along with Wachovia Securities and Credit Suisse.

The Capital Auto Receivables Asset Trust, 2007-3, a $1 billion auto ABS transaction on which Banc of America Securities, RBS Greenwich Capital and Credit Suisse acted as lead managers, was among the deals that wrapped up pricing on the previous Friday.

"The market seems to be getting a little bit of its legs [back]," one trader said.

The quietness of issuance from the RMBS sector is affecting the U.K. mortgage markets, as well as that of the U.S., said one trader. He added that in the U.K., access to credit was fairly muted, even for the borrowers with the best credit. The $1.4 billion Morgan Stanley ABS Capital, 2007-HE7, an HEL deal, did manage to price last week, although a large portion of the notes were not offered. The investment bank was the sole bookrunner on the transaction, whose notes priced at triple-digit spreads, even on its double-A-rated classes. The tranche with a 7.41-year duration - the deal's longest - came in at one-month Libor plus 200 basis points. Moody's Investors Service and Standard & Poor's, respectively, gave that tranche Aa1'/AA+' ratings. Next in the waterfall was the 6.32-year tranche with Moody's and S&P ratings of Aa2' and AA', respectively. It priced at 400 basis points over. The 4.98-year, triple-B-rated tranche saw the deal's widest spreads - one-month Libor plus 1,250 basis points.

Other than that, RMBS activity was subdued, but co-lead managers Morgan Stanley and RBS Greenwich Capital were circulating a $982 million, 144A MBS deal, of which about $578 million in notes would be offered. Only the triple-A, double-A and single-A notes were being offered, and the A1 class was withheld, according to information from the managers. Of the notes being offered, the triple-A, 0.80-average life tranche saw guidance at one-month Libor plus 85 basis points. The 5.14-year, single-A tranche saw guidance come in at 600 basis points over the same benchmark, according to preliminary data. The notes with the longest duration, the 7.6-year, triple-A tranche, saw guidance come in at 135 basis points over.

Among upcoming deals were a $1.4 billion Delta Airlines aircraft transaction, a $500 million Capital One Prime Auto Receivables Trust, a $454 million GSAA Home Equity Trust and a $710 million Merrill Lynch First Franklin Mortgage Loan Trust.

(c) 2007 Asset Securitization Report and SourceMedia, Inc. All Rights Reserved.

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