Most of the action in last week's asset-backed market took the form of management re-organization, as several group heads, traders and researchers suddenly switched firms - a great musical chairs happened (see stories on page 1).
Highlights: Jorge Calderon and Philip Weingord left Credit Suisse First Boston for Deutsche Bank AG, and James Titus left Donaldson, Lufkin & Jenrette for GMAC.
"That's not even uncommon for this time of year, for people to bop around and this kind of stuff," said one ABS analyst.
Apparently not.
On the trading block, however, the tone was generally positive, though issuance varied, depending on how you cut the week. From Thursday to Thursday, seven or so deals priced for a total just over $4 billion.
On the week, Swaps moved in marginally, Treasurys stabilized, and demand for short term paper remained strong.
Case in point: DaimlerChrslyer was able to secure its 0.25-year, A-1 class notes before publicly offering the rest of the deal. The other three tranches priced within or tight of guidance, according to published reports.
"I'd say the condition is still somewhat status quo," said Jeff Salmon, ABS analyst at Barclays Capital. "It does appear that swap spreads have improved a bit over the last few trading sessions, which bodes a little bit better for fixed-rate product."
With the continued inversion of the Treasury curve, especially in the five to ten year sector, most investors are sitting tight, Salmon explained, which has pushed out the spreads on the longer maturities quite a bit.
"What we're seeing is some decent demand for short term paper: two and one-half years and in," he said. "You got a lot of people buying money market eligible paper. We've seen blocks of 2A7 eligible paper trading at tight levels."
Spreads for fixed-rate credit cards moved in three to four points across the board, leveling off the widening seen the prior week.
For the first issue of March, Conseco priced a $900 million home-equity deal, co-managed by Banc of America Securities and Credit Suisse First Boston. The transaction, which was structured in nine parts, had average lives ranging from 0.85-years to 5.64-years, according to reports. The shorter maturities priced within talk while the longer pieces priced slightly wide.
As for the pipeline, Centex was showing investors a seven-piece home-equity deal worth just over $300 million, according to published reports. Average lives ranged from one-year to 7.5-years. The deal is insured by Financial Security Assurance.
Also at press time, Columbus Loan Funding, Wilbraham, and Gateway were all marketing collaterilized debt obligation-type products worth well over $1 billion combined. Also GreenPoint had a $340 million, fixed-rate manufactured housing deal going.
Watch for GMAC affiliate Capital Auto, and American Honda Finance, both rumored to be considering deals sometime soon.
Overall, players are saying it's short term, amortizing paper that's in demand.
"If you look at what happened [a few weeks ago] in terms of the credit card market, on some of those deals the pricing was not too optimal or at least they widened the pricing out a bit," said one trader. "If anything, that's a sign saying hey, investor demand may not be here yet, especially on the longer dated stuff.' The market's going to continue to favor short dated kind of stuff."
