Following its recent equity IPO, Irvine, Calif.-based lender Encore Mortgage Corp. came to market with its first stand-alone securitization last week, a whopping $1.6 billion home equity deal last week.

The all floating-rate deal was issued from the Encore Credit Receivables Trust Series 2005-1 and priced in the midst of some of the tightest spreads ever seen in the home equity market. The deal was lead by Countrywide Securities Corporation, itself a leading issuer and underwriter of home equity ABS, as it tries to increase its volume of third-party mandated deals. Co-manager on the deal was Wachovia Securities.

The two 2.12-year 1A1 and 1A2 tranches of the deal, were not brought to the market but were most likely distributed to agencies. The deal's $381 million, one year 2A1 tranche priced nine basis points over one-month Libor, while the $292 million, three-year 2A2 tranche priced at 20 basis points over Libor - inside of the spread seen on the 2.42-year A2MZ class from Morgan Stanley's ABS Capital Trust 2005-HE2 deal, which priced at 25 points above Libor. Still, those spreads were two to three basis points outside of the record spreads achieved by the $1 billion Centex deal earlier this month, which priced at seven points over Libor for its one-year tranche, and 17 points over Libor for its three-year tranche.

Encore went public last month and is listed on the New York Stock Exchange under the ticker symbol ECR. Officials from Encore were unable to comment due to quiet period restrictions. Officials from Countrywide were also not available for comment.

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

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