The asset-backed market priced just over $9.37 billion last week in home equity laden primary activity. The Street is currently prepping for a busy final month of the quarter. Home-equity supply totaled $6.4 billion, with three offerings in the $1 billion size range. Other sectors of the market, however, were relatively quiet, with sporadic pricings.
As quarter-end months have historically seen a rush of issuance from the home equity sector, negative comments made by Alan Greenspan had little impact on mortgage-related supply, as loans made throughout last year will eventually hit the ABS market.
The largest deal to hit last week came from mega-issuer GMAC-RFC, which had two offerings making the rounds from separate issuance trusts. The $2.1 billion RASC KS2 trade led jointly by Banc of America and RFC Securities saw its senior classes price tighter than initial guidance, but widen out 20 to 25 points down in credit. Despite the widening, the fixed-rate triple-B plus MI3 class, with a 5.35-year average life, did price at 300 basis points over swaps. The triple-B floaters, with a 3.21-year average life, priced at 375 basis points over one-month Libor.
GMAC-RFC also had a smaller, $325 million high-LTV RAMP RZ2 offering via Salomon Smith Barney that had yet to price as of press time. The 4.92-year triple-B class for the second RAMP trade of 2003 was marketing in the 310 basis point area over swaps.
AmeriQuest Mortgage completed its third ABS of the year, a $1.07 billion fixed- and floating-rate deal via Deutsche Bank Securities and UBSWarburg. Besting GMAC-RFC, AmeriQuest cleared its triple-B plus M3 subs at a 275 basis point level over one-month Libor. Its straight triple-B M4 class priced at 375 basis points over one-month Libor.
With its first home equity ABS of the year, The CIT Group priced a $940 million fixed-rate offering via Salomon Smith Barney. Pricing a touch outside of the competing top-tier mortgage issuers for senior notes, CIT priced its 5.4-year triple-Bs at 300 basis points over swaps.
Homebuilder Centex Corp. suffered a similar fate as CIT, pricing outside of GMAC-RFC and AmeriQuest. Centex, which brought both fixed- and floating-rate paper in a senior/sub structure sold its 4.39-year triple-Bs at 350 basis points over one-month Libor. One level up on the capital structure, however, the split-rated MV3 floaters priced at 265 basis points over one-month Libor, bolstered by a single-A rating from Fitch Ratings.
The credit card sector saw a first-time twin three- and five-year offerings from the new Household Finance, General Motors Corp. affinity trust, totaling $1.25 billion, after the three-year offering was increased in size. The deal was led jointly by Banc of America and JPMorgan Securities. Triple-As for both deals priced at impressive levels, with the three-year A class pricing at six basis points over one-month Libor and the five-year A class pricing at 12 basis points over one-month Libor.
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