The ABS primary market continued to slow last week, but still showed an impressive $5.2 billion in the form of fewer but larger transactions, up from the previous, just-over-$3 billion holiday-shortened week. As of press time, however, just $4.1 billion had priced.

The largest deal of the week, from Chase Auto, wasn't around very long due to the strong investor demand for high-quality paper. Despite the fact that it was the largest auto deal Chase had ever brought to market, the book grew quickly and oversubscription rates soared; the senior classes went subject before noon Monday, just hours after being announced.

Spreads, set initially at aggressive levels well inside of the Honda deal from late January, moved tighter versus guidance to price at the tight end or tighter than premarketing levels. When the dust settled, spreads closed up to seven basis points inside of Honda for one-year paper, which had likely moved tighter, in line with secondary trading.

The fixed-rate side of the auto sector now has new tight levels for 2002, with the A-1 2A7 class pricing at a remarkable three basis points under an interpolated 4.5-month LIBOR. One-year A-2 paper saw the heaviest demand, with oversubscription topping three times the available supply and pricing at 11 basis points over EDSF.

Two and three-year A-3 and A-4 classes met slightly less demand but indications for each still topped two times the available allocations and priced at 12 and nine basis points over comparable swaps, respectively.

"The most widely distributed classes of the offering were actually the two- and three-year classes," noted Andy Dym, co-head of North American ABS for lead manager JPMorgan. "Each of those two classes had close to 30 different buyside accounts getting bonds."

Also pricing large deals was the home-equity sector, led by Lehman issuance vehicle ARC Trust, with a $1.5 billion deal and a billion-dollar Australian RMBS offering from Westpac via Salomon set for an early-this-week pricing. Additionally, BofA brought a $343 million self-led HEL deal.

ARC Trust, which initially consisted primarily of a $1.4 billion triple-A-rated senior but saw a restructuring into twin 3.2-year seniors, priced mid-week via Lehman. The classes, initially talked in the low 30-basis-point-area over Libor as a single tranche, came in at 34 basis points over for the A-1 and 28 basis points over for the A-W.

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