New issue activity picked up last week, as the winter conference season came to a close. Just over $9 billion in ABS product was marketed, $6.05 billion of which priced as of press time and the remainder scheduled to wrap Friday. While the majority of supply came from the home-equity sector, a trio of credit card deals made the rounds. After a strong start to the year, auto-loan ABS continued to lag, absent from the market since mid-January.
After spreads blew through a tailspin in the fourth quarter, the home-equity sector is showing signs of improvement, as anticipated. Whether it is due to a lack of supply last December, improved sentiment with the subprime mortgage borrower or the "January effect," spreads for mortgage-related ABS from top-tier issuers have reverted inward and triple-B classes are now routinely pricing inside of 400 basis points over one-month Libor.