With more than $10 billion pricing last week, the U.S. asset-backed market looks poised to set a new record for monthly issuance volume, possibly hitting $40 billion should it continue at this weekly pace. If that happens, the market would surpass $200 billion for the year, exceding last year's record supply totals.

Some market observers are cautious, however, as new supply has been strong all year and it is unlikely that the market would see a third month this year with more than $30 billion of ABS product sold. The current record for monthly issuance was set this March as $37.9 billion of public and 144A supply was placed in the hands of investors. This May, the market saw $37.2 billion price.

Playing into this is the fact that the third month of a given quarter is traditionally strong for new issuance, as companies using gain-on-sale accounting need to securitize quarterly in order to realize dividend earnings.

Dan Castro, head of ABS research at Merrill Lynch, was the most bullish for September, with estimates of $30 billion to $35 billion of new-issue supply. Rival analyst Jeff Salmon, head of ABS research at Barclays Capital, calls Castro's estimate "aggressive" and by contrast pegs September supply in the $27 billion to $28 billion range.

A bombastic week

If the issuance seen last week is any indication, there is no shortage of supply or investor interest in the near future. Pricing last week were numerous billion-dollar deals, two of which were increased in size and still priced tight to initial guidance.

Large new issues were seen this week from issuers AmeriCredit, The CIT Group, Capital One, DaimlerChrysler, Keycorp, GMAC-RFC, Long Beach Mortgage and Toyota Motor Credit, covering the whole spectrum of asset sectors.

The most successful offerings of the week came from programmatic subprime auto issuer AmeriCredit and credit card concern Capital One.

AmeriCredit priced $1.6 billion of a retail auto loan-backed deal via Credit Suisse First Boston, which was increased from an initial $1.2 billion. The offering priced in line with initial guidance despite the increase in size. The one-year class of the series 2001-C offering priced at 11 basis points over EDSF, just three basis points wider than the comparable class of the prime offering sold by Nissan the week prior.

Capital One priced $1.28 billion of a seven-year credit card deal, the sixth of the year for the frequent issuer. The offering, containing both fixed and floating-rate tranches, was led jointly by Banc One and Deutsche Banc Alex. Brown. The floating-rate $1.056 billion senior class priced with a coupon of 19 basis points over one-month Libor.

The last of the big-three auto makers to tap the market this quarter was DaimlerChrysler, which sold $1.5 billion of prime retail auto loan paper via the joint leads of CSFB and Bear Stearns. The series 2001-C deal, with three publicly offered fixed-rate classes, priced at levels of 11 over EDSF in the one-year as well as levels of 10 and five basis points versus swaps for the two- and three-year tranches.

Staying with prime retail auto loans, Toyota priced a $1.1 billion series 2001-C offering via the joint leads of Deutsche Banc and Merrill. The benchmark foreign captive issuer priced its offering, with a one-year fixed, two-year floating- and three-year floating-rate classes, at levels two to three tight versus comparable DaimlerChrysler paper.

Two deals of note made the rounds in the home equity loan sector, as GMAC-RFC priced $1.96 billion of subprime paper from its RASC issuance vehicle and Long Beach Mortgage priced $1.015 billion of paper featuring a partial Fannie Mae wrap.

GMAC-RFC priced its $1.96 billion RASC 2001-KS3 late in the week via the lead of Bear Stearns. The offering, which contained 13 fixed- and floating-rate classes, priced right in line with price guidance.

Washington Mutual unit Long Beach Mortgage was in the market with a $1.015 billion home equity loan-backed offering via the lead of Greenwich Capital. Just over half of the issue came in the form of a single-tranche floating-rate Fannie Mae T-9 series wrap. Although the deal had yet to price as of press time, the 2.5-year senior class was talked at 11 to 12 basis points over one-month Libor.

With its first equipment lease deal in the public term market since being acquired by diversified manufacturer Tyco International in June, The CIT Group sold $1.1 billion of paper backed by leases for mid-ticket manufacturing and construction equipment. This is a change from past deals, which have been backed by smaller-ticket high-tech office and telecommunications equipment leases.

The series 2001-A deal, led by Deutsche Banc, priced in line with guidance for the most part, as softness was seen in the two-year tranche.

With its first student loan-backed offering in one year Keycorp priced $798 million of notes backed by both FFELP and privately guaranteed loans. The structure, which separated the loans into two groups, was credited with helping the offering see oversubscription rates of two to three times oversold. Deutsche Banc led the series 2001-A deal, which saw offered spreads widen a touch prior to pricing.

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