The U.S.ABS market shot better than par in post-conference primary trading last week, pricing $5.2 billion amid continued spread tightening in most sectors. Supply came from the auto loan, credit card and home-equity sectors of the market, and also saw an Australian RMBS and manufactured housing transaction, all facing strong demand.

Coming off the good vibes felt at the IMN/Fabozzi ABS West conference, issuers, underwriters and investors all came out of the gate running. Helping business was the fact that all of the issuers seen were considered top-tier names within their respective market niches.

Amazingly, demand for credit card-backed paper remains strong, as buyers would much rather hold secured structured supply than the unsecured corporate notes from the same issuer. SSB research head Peter DiMartino points out that investors who want exposure in a particular name have a choice between secured and unsecured bonds, and they are turning to the former rather than the latter.

In particular, according to DiMartino, this is being witnessed with the more narrowly focused issuers, instead of large diversified global entities. "As we have seen in corporates, the downside in the unsecured markets can be swift and painful; this is not the case in on-the-run ABS," DiMartino said.

American Express and Sears each accessed the market last week for a total of $1.62 billion of three and five-year funding, both tapping JPMorgan as lead. "Both of the issuers had good deals and got the tightest spreads either has seen in some time," said Bill Haley, in JPMorgan's North American ABS group. "This shows the general health of the credit card ABS for top issuers."

While Sears increased the size of its offering to $757 million from $540 million, pricing its three-year deal at 10 basis points over one-month Libor, AmEx, as per its modus operandi, chose not to, even though the demand was sufficient. The $759 million five-year floater came in at 11 over one-month Libor and $73.6 million of single-A-rated B paper priced at 40 over.

In autos, leading non-prime lender AmeriCredit priced $1.6 billion of fixed- and floating-rate notes, a trend that was noted in the "Auto Loan Securitization" panel at ABS West. The Fort Worth Texas-based lender for primarily used vehicles chose CSFB and Barclays Capital - the first-ever auto mandate for the bank - to lead the deal jointly.

The AMCAR 2002-A deal went well, moving two basis points tighter than initial indications. AmeriCredit too had the opportunity to upsize its offering, but "we did some prefunding last quarter so we focused on pricing execution with this offering," according to Preston Miller, executive vice president and treasurer of AmeriCredit.

In foreign RMBS, Commonwealth Bank of Australia sold $1 billion of supply to U.S. buyers as part of a $1.5 billion global deal through Deutsche Banc. Following repeated references to the benefits of Aussie RMBS collateral in Phoenix, this deal set a new tight level for the collateral type.

"The transaction was a tremendous success at plus 17, the tightest pricing on an Aussie mortgage deal in recent history, very broadly distributed to over 20 accounts, split between the U.S. and Europe," said one syndicate source. By contrast, initial indications from the buyside expected the deal to hit somewhat cheaper, in the 20 to 22 basis point area over three-month Libor.

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