Issuance came at a relatively slow pace last week, as many participants were preoccupied with pending war with Iraq. Despite it being the second-to-last week of the first quarter, just over $11 billion of supply priced in a slow-to-develop market.

Volume was boosted by another large, global RMBS, this time $3.5 billion from the Holmes Financing trust of U.K. bank Abbey National plc. The floating-rate, U.S. dollar-denominated offering was led jointly by JPMorgan Securities and Salomon Smith Barney. The largest tranche in the transaction, the indicative $1.25 billion of 2.8-year 2A notes priced at 15 basis points over three-month Libor.

So far this year, the foreign MBS sector has accounted for $18.3 billion in supply, the largest of which being the $7.3 billion Permanent Financing offering, featuring Dollar, Euro and British Pound-denominated tranches, from HBOS plc.

Introduced last year, Triad Financial priced its second-ever subprime auto-loan transaction, a $910 million 2003-A trade via Deutsche Bank Securities that featured a full Ambac wrap. Triad, a subsidiary of Ford Motor Credit, priced its two-year floating-rate A3 class at a spread of 19 basis points over one-month Libor. The three-year A4 priced at 36 basis points over one-month Libor, versus talk in the 30 basis point area.

Dollar-Thrifty Auto Group tapped the market with a rental-car fleet securitization from its Rental Car Finance Corp. issuance vehicle. Dollar's RCFC has sold ABS annually since 2001, as well as in 1999 and 1997. The Rule 144A, series 2003-1A deal, led jointly by Deutsche Bank and JPMorgan, came with a single, MBIA-wrapped, floating-rate tranche. The 3.9-year offering priced with a coupon of 40 basis points over one-month Libor.

Sallie Mae, following through on plans to increase its securitization volume this year, brought its second student loan deal of the month. Totaling $1.27 billion, series 2003-3, backed by FFELP collateral, priced via Banc of America Securities. Three-year A2 bonds priced at two basis points over three-month Libor, in from talk in the three basis point area and five-year A3 bonds priced at 9 basis points over three-month Libor, in line with guidance.

To date, Sallie Mae has sold four student-loan ABS, totaling $5.9 billion, including one (2003-A) non-FFELP graduate-student loan deal. This puts Sallie on pace to surpass its raised expectations for securitization volume for 2003.

Also up there on the 2003 ABS volume chart is Citibank N.A., which priced its sixth credit card ABS of the year last week. The $1.25 billion, 2003-A4 triple-A rated deal priced a four-year senior at seven basis points over three-month Libor. To date, Citi's six credit card transactions total $5.9 billion, but it also has a 12b-1 fee ABS under its belt, adding another $175 million.

Discover Card sold $947 million of seven-year senior/sub notes, which was increased from the initial $789. The triple-A class priced at 20 basis points over one-month Libor, but terms of the single-As, talked in the 60 basis point area, were not disseminated by lead manager Morgan Stanley.

It was a pretty slow week for home equity issuers and investors, with just $2.2 billion of domestically originated paper sold. Long Beach Mortgage led the way, with a $1.6 billion offering, roughly half of which was a W-5 Fannie Mae guaranty class. The $788 million three-year class, priced at the GSA-induced level of 11 basis points over one-month Libor. Unwrapped AV1 class notes, with a 2.5-year average life, priced at 32 basis points over one-month Libor. Banc One Capital Markets and RBS Greenwich acted jointly as lead manager on the transaction.

Seemingly seeking to lock in the current low interest rates, GMAC Mortgage brought one of the few fixed-rate deals the home-equity sector has seen this year, a $634 2003-HE2 trade via Bear Stearns. Backed by a full Financial Guaranty Insurance Corp. wrap, the five-tranche structure saw its three-year A2s price to yield 59 basis points over comparable swaps and its five-year A3s at 78 basis points over swaps.

The Commonwealth of Virginia became the latest state to cash in on the record master settlement agreement between the tobacco industry and 46 states, tapping the tax-free municipal and taxable ABS market for a total of $725 million. Backed by damages levied on the four largest domestic cigarette manufacturers, the deal was led by Morgan Stanley. Demand was as strong as smoke in local tavern, with the $154 million four-year 2003-B asset-backed portion of the issue clearing at 260 basis points over the 4 3/8 Treasury due May 2007, inside talk in the 300 basis point area.

Copyright 2003 Thomson Media Inc. All Rights Reserved.

(http://www.thomsonmedia.com)

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