At press time, the home-equity sector was showing $1.4 billion in issuance for the week, perhaps on its way to the prophesized correction - the belief being that issuers who would normally have come to market in the first quarter held back their deals.

Among the said no-shows, Advanta Financial Corp. jumped the box with a $400 million HELOC - very well received, traders said.

The other $1 billion came from Option One, which featured a Freddie Mac wrap. The Option One deal was also well received.

In fact, the bid for all floating-rate product remains strong, though a sell-off of Treasurys, which pushed out Treasury yields, narrowed the spreads for interest-rate swaps, which in turn narrowed the spreads on fixed-rate paper as well.

"The swaps market has been mostly driving the fixed-rate product," one trader explained. "The floating product continues to perform very well, especially on the short end. Three-years and in, there is a very strong bid for."

The five-year notes were not looking as attractive, the trader said.

However, overall the consensus is positive. Players are starting to bring more deals, activity is picking up - apart from the widening Treasurys, spreads and swaps, for the most part, moved independently of the madness in the equity markets.

"That hasn't been a factor really," a market observer said. "It's been external."

A Bid for FirstPlus Paper

In the secondary market, FirstPlus paper has been hotly traded after the news got out that Countrywide will service the platform.

"If anything, double-B's have gone up in price and there's been a lot more interest in FirstPlus," said a secondary market trader. "A lot of people of people knew the news was coming, but it wasn't official."

There was a bid list planned for last Thursday for $10 million in FirstPlus paper, but due to Good Friday, which changed Thursday to a half-day, the bid was pushed, now planned for tomorrow.

"It will be interesting to see how this bid list goes off, for the triple-B's that are out," the trader said. "I can tell you that the FirstPlus, over the last three or four months, it came in from the low 800s. I was offering paper for 800-825. And since then there have been large $5 million trades in the 500s, and this was before the Countrywide news came out."

In the last three months, players have been looking for triple-Bs, though not for collateralized bond obligations, the trader said.

"It wasn't the CBO bid," the trader said. "Everyone's saying that the CBO bid tightened the market. Last month I traded $32 million in triple-B secondarys, and not one bond went to a CBO."

Regardless, FirstPlus is the largest 125-platform, and if the sale of the servicing business hadn't been good news, it would have had a negative effect on the entire 125-sector, the trader said.

"It looks like there's not going to be any pickup in delinquencies because of the transfer," the trader said. "Besides trading, it does a lot for the 125-sector overall, because FirstPlus has the most outstanding collateral and if they went down, they'd take everybody with them."

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