Business in the ABS market continued to come out of its summer slowdown last week, as market players expected to see between $10 billion and $14 billion in new issues hit the market.
As usual, the home equity securitization sector dominated production in the primary market. Some market players reported increased demand for the non-investment grade, Ba1 classes of home equity loan floaters, especially from CDO managers looking to ramp up on the paper for their mezzanine deals. Some triple-B-minus tranches, meanwhile, were beginning to soften. Some traders were seeing guidance near 200 basis points for that paper, compared to two weeks ago, when deals in that category were getting done at 180 basis points.