Total ABS supply topped $11.7 billion last week, as quarter-end rapidly approaches. Driven by a pair of blowout deals the auto sector came alive, pricing $5 billion in new-issue supply while home-equity supply sustained its momentum, with over $5 billion in supply. Also of note, the 12b-1 fee ABS market graduated to the quasi-public Rule 144A market.

Amid questions over its financial well-being, Ford Motor Credit showed that it has little difficulty accessing the ABS market, pricing its second deal of the year. The $2.2 billion offering, via Credit Suisse First Boston, Goldman Sachs and Morgan Stanley, consisted of fixed- and floating-rate supply and priced within guidance. The day prior to pricing, Banc of America Securities held a conference call Tuesday to discuss "Ford's recent deals and what may change [our] mind on Ford's access to ABS."

Ford proved it had investor's confidence, and when all was said and done, Ford priced 2003-B up to seven basis points inside its January pricing, for fixed-rate supply. Floating-rate 2003-B paper priced one basis point inside of 2003-A floaters.

Toyota Motor Credit, the most favored captive auto issuer priced the tightest auto deal of the year, hitting single-digit spreads throughout the capital structure. Deutshce Bank Securities and Salomon Smith Barney jointly led the $1.07 billion deal, for which spreads in some classes approached sub-Libor levels. For example, the two-year floating-rate A3A class priced with a two basis point spread to one-month Libor and the three-year fixed-rate A4 priced to yield three basis points over Swaps.

Late in the week, Capital One Financial announced the first deal off its prime auto loan trust, COPAR 2003-1 for short. Led jointly by CSFB and Wachovia Securities, the senior/subordinated offering had yet to see price guidance as of press time.

Also, Regions Financial, a unit of Morgan Keegan priced just its second auto-loan ABS and DriveTime Financial Services, formerly Ugly Duckling Corp., completed its first deal of 2003.

In home equity ABS, the largest deal of the week was from Long Beach Mortgage, a $2 billion deal via RBS Greenwich, as well a $1 billion HELOC ABS from Wachovia Bank N.A. GMAC Mortgage was marketing $631 million of home equity paper via Banc One Capital Markets and MSDW Capital priced the $681 million New Century collateral-backed notes announced late the week before.

In credit cards, MBNA priced its second triple-A senior offering this year from its MBNASeries trust. Coming in at $1 billion, the three-year floater priced at five basis points over one-month Libor via BofA and JPMorgan Securities, jointly.

First National Bank of Omaha made an infrequent appearance in the primary market, selling $500 million of three-year notes, which consisted of both fixed and floating supply. Also led by BofA, First National Bank Credit Card Trust 2003-1 priced its three-year triple-A class at 10 basis points over one-month Libor and its single-As at 44 basis points over swaps. The triple-B class, however, widened from guidance in the 140 basis point area over one-month Libor, to clear at 160 basis points over. Demand was strong enough to increase the deal's size from the initial $400 million.

As reported last week, Rule 144A ABS investors got their first taste of 12b-1 fee collateral, with the pricing of $175 million of Citibank Hedged Mutual Fund Fee Trust 2003-1. While more traditional assets in ABS don't offer much by way of spread nowadays, this offering delivered a return on investment, for the relatively short-dated, historically volatile collateral.

The single-A rated 1 class, with a 2.7-year average life, priced at a spread of 285 basis points over one-month Libor and the fixed-rate 2 class, with a 2.9-year average life, also sporting a single-A rating, priced to yield 5.28%. By contrast, three-year U.S. Treasurys yielded, as of Thursday's close, 1.931%.

Copyright 2003 Thomson Media Inc. All Rights Reserved.


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