New-issue supply totaled just $4.4 billion as early-week Treasury declines stole the focus, delaying transactions in the market. A pair of de-linked credit card offerings came and went quickly, but the largest offering last week was brought by student lender Sallie Mae, continuing the deluge of student loan supply this year. Also, a pair of NIMs priced, from two of the large mortgage lenders in the market.
Early in the week, Capital One announced a $500 million two-year triple-A senior tranche, just the second triple-A from the COMET issuance trust this year. The off-the-run two-year tenor was driven by a reverse inquiry interest that quickly led to as many as 12 separate accounts participating, sources said.
The tightened pricing level for COMET 2003-A2 of 11 basis points over one-month Libor shows how sentiment has gotten better for Cap One. In its first triple-A offering of the year, a three-year 2003-A1 priced at 39 basis points over Libor in April. Barclays Capital and Wachovia Securities led the offering jointly.
Late in the week, MBNA America Bank announced a $200 million 2003-B3 offering, which had yet to price as of press time. The single-A rated five-year floater, in the market via Lehman Brothers, was expected to price Friday at 37.5 basis points over one-month Libor.
But once again, Sallie Mae commanded most of the market's attention, with its $2 billion all-FFELP loan backed deal via Credit Suisse First Boston and Merrill Lynch. Unlike the previous Sallie Mae deal, $2.5 billion of 2003-8 paper, the latest deal lacked any Euro-denominated classes.
For the most part, spreads remained loyal to price guidance with some softening seen in the three-year A2 senior class, pricing one basis point outside of talk to close at four basis points over three-month Libor. Down in credit, the double-A 10-year B class priced at 56 basis points over three-month Libor, out from talk in the low 50 basis point area.
For once, a conspicuous lack of dealer shelf supply kept home equity issuance to just $1.6 billion last week, as lenders CDC, Fremont General and IndyMac Mortgage each priced offerings.
CDC, led by Morgan Stanley, saw a restructuring in its seniors that turned a $379 million 2.8-year A2 class into four triple-A seniors ranging in tenor from 1.3-years to 5.5-years. While the 2.8-year A2 class priced at 36 basis points over one-month Libor, the market had turned an eye to the triple-B minus tranches, for which underwriters hoped to come under 800 basis points over Libor on a discounted basis. CDC achieved that goal, pricing with a 375 basis point coupon with a discount margin of 795 basis points over. This is compared to the most recent Long Beach Mortgage offering, which priced its triple-B minus bonds at 790 over on June 27.
IndyMac Mortgage, a more common name to the prime mortgage market, brought its first home equity offering of the year, a $392 million 2003-A via Countrywide Securities, consisting of both fixed- and floating-rate supply. IndyMac's senior AV2 class, with a longer-than average 3.2-year tenor, priced at 43 basis points over one-month Libor. IndyMac had yet to price its subs as of the market close Thursday.
Fremont General also brought its first home equity ABS of 2003, a $550 million 2003-A deal via RBS Greenwich. The 2.7-year senior floaters priced at 35 basis points over one-month Libor, while the straight triple-Bs priced at a spread of 450 basis points over. Fremont did not offer a triple-B minus class.
A pair of un-wrapped triple-B rated NIMs were seen last week, a $58.5 million floater from Option One Mortgage and a $140 million fixed-rate deal from Long Beach.
It was a lackluster week for auto supply, with just one offering making the rounds, a $93 million from SeaWest Financial. The Rule 144A offering priced via West LB and no details were made available.
Left on tap for this week are a stranded cost ABS from Oncor, and the aircraft lease ABS from Aviation Capital, which continues to market via Wachovia.