Asset-backed new issuance was slow to develop last week, as only $2.5 billion of supply had priced as of Thursday's market close. Numerous deals were pending as of press time, for an additional $4.75 billion, making the total supply marketed last week approximately $7.7 billion.

Meanwhile, the asset-backed securities markets were set to surpass last year's issuance levels with two months to go.

As of Friday morning, total public issuance stood on par with last year's record $220 billion number and Merrill Lynch's Dan Castro estimates total issuance through year-end at $50 billion. When factoring in 144A and CDO issuance, well over $300 billion will have been placed in the hands of investors. According to IFR Asset-Backed Securities, the CDO sector accounts for roughly greater than half of 144A supply.

While there have been major supply increases in some off-the-run collateral types, such as stranded costs and foreign RMBS, Castro notes that each of the three asset classes - autos, cards and home equity - are up greater than 20% from levels seen through last November. Most had expected this to be a banner year, as low interest rates seen all year boosted auto-loan origination and credit card expenditures and spurred a home-equity refinance wave.

New-issue flows grew early last week, but the market stalled as Ford Motor Co. occupied syndicate personnel across the country with $8.5 billion of paper and GMAC added an additional $4 billion Thursday. Or as one trader put it, "Last week was busy, next week's pipeline looks full, this week is just slow."

Early in the week, GMAC Mortgage completed a $189 million home equity loan-backed offering after slight tweaking of tranche sizes. The majority of the offering, $129 million, was sold directly to an unspecified agency, while the remaining $60 million of triple-A paper, with a 4.52-year average life, priced to yield 5.523% or 110 basis points versus swaps.

Capital One priced Wednesday the $845 million piece of a $1 billion total credit card-backed offering, the company's eighth of the year and second of the month. The triple-As priced at the tight end of guidance to yield 4.70% or 19 basis points over swaps. The following day, $77.5 million of floating-rate single-A rated B paper came in at one-month Libor plus 54 basis points.

Additionally, Lehman Brothers sold $1.3 billion of seasoned manufactured housing-backed notes, which were originated by The CIT Group Inc.

In the private Rule 144A markets, retailer Nordstom Inc. was marketing its first credit card-backed ABS through bookrunner Banc One. The $300 million five-year soft bullet was talked all week in the 37 basis point area over swaps, offering a substantial premium to the comparable Capital One senior class. Sources close to the deal knew they had a lot of wood to chop on this offering, due to the infrequency of issuance out of the issuer and the fact that private deals take longer to sell.

Credit Suisse First Boston ran the books for two deals last week, the recreational vehicle loan-backed deal from Conseco and a home-equity deal from Indymac Mortgage. Conseco's $411 million deal slowed by mid-week, resulting in a restructuring that reduced the sizes of the four senior tranches and led to the creation of an additional triple-A rated senior. Lender IndyMac had $480 million of paper in the market last week as well that was not quickly progressing and late word was that it would be restructured.

Two foreign RMBS deals were announced last week, from frequent issuer Abbey National's Holmes Financing vehicle and a deal out of Sweden that each contained large dollar-denominated classes. Holmes was marketing $3 billion (equivalent) of a U.K.-originated mortgage paper, of which approximately $1.7 billion was offered in the U.S. through CSFB, Lehman and Salomon, jointly. SRM Investment had a Swedish deal marketing through Merrill's lead, containing a $500 million dollar-tranche.

Seen as Friday's business, San Jose, Calif.-based First Franklin was set to price approximately $450 million of high-quality home equity paper via Greenwich Capital Markets. The offering consisted of floating-rate classes with a senior/mezz/sub structure, sources noted. Further details were not immediately available.

Breaking into the market at the tail end of the week previous, issuance vehicle Consumers Funding LLC was expecting to price $468 million of rate reduction bonds for below-investment-grade parent CMS Energy. Late in the week indicative levels were still sketchy, with lead manager Morgan Stanley disseminating "preliminary price thoughts" that were five to 10 basis points cheap to the Reliant Energy deal that priced Oct. 17. Pricing for Consumers was seen early this week at levels in the high teens to twenty, mid twenties, and high thirties to 40 basis point ranges for three-, seven- and 10-year classes. Also, a 12.8-year class was seen in the high 40's to 50-basis-point range.

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