New issuance in the U.S. asset-backed securities market picked up last week, pricing $7.6 billion of new supply. That total tops the previous, holiday-shortened week, by approximately $2 billion, led by large offerings from Residential Funding Corp., Citibank and Mitsubishi Motor Credit. Also, Chase brought two credit card-backed deals totaling $1.5 billion.

The week's largest single offering came from GMAC unit RFC, which sold $1.5 billion of a subprime mortgage-backed security from the company's RASC shelf via the lead of J.P. Morgan Securities.

The series 2001-KS2 deal was the first senior/mezzanine/subordinated structure off the RASC shelf in three years and the first to have collateral with deep mortgage insurance backing the loans.

The deal, which had average FICO scores of 602 (fixed classes) and 600 (floating classes), featured roughly 66% of the collateral insured up to 65 LTV, sources said.

The offering went extremely well as a result, tightening two to five basis points in most of the classes. "This offering is one of, if not the benchmark issue, in this sector this quarter," said Matt Whalen, a vice president in the asset-backed group at J.P. Morgan.

If not the largest deal, the $1.125 billion three-year senior offering from Citibank's "block & trap" Master Trust was the fastest, having been announced, launched and priced all in the course of one day. In addition the offering was increased upon launching, from the initial $1 billion.

The triple-A rated single-tranche three-year offering priced via unit Salomon Smith Barney, at par with a coupon of five basis points over three-month Libor.

Mitsubishi Motor Credit priced $720 million of a prime auto loan-backed offering via the lead of Morgan Stanley, of which $666 million made it into the hands of investors. The series 2001-2 offering contained one fixed-rate and three floating-rate senior tranches and $47 million of a single-A rated B class, retained by the issuer.

The A1 and A2 classes, with average lives of 0.39-year and one-year each, priced in line with initial guidance but further out on the curve; the two-year A3 and 3.48-year A4 classes widened three basis points each. Sources credited the widening to skepticism regarding the deferred-payment loans in the pool, which do not begin paying for one year.

With the simultaneous offering of two credit card-backed deals, Chase Credit Card Master Trust opportunistically tapped a strong market, successfully selling $595 million of five-year series 2001-2 and $892 million of three-year 2001-3 floating-rate notes via unit JP Morgan Securities.

The $750 million senior class of the three-year 2001-3 senior paper was extremely successful, pricing with a coupon of one-month Libor plus seven basis points. According to Marta Ricardo, vice president of JP Morgan's North American asset-backed group, that is the tightest level to one-month Libor in the credit card sector since the pricing of a First USA Bank credit card-backed floater in June of 1998.

Also of note last week were a $633 million credit card deal from American Express and a $400 million business credit card offering from First National Bank of Omaha's vehicle, First BankCard. Mortgage-backed deals priced from CSFB vehicle Asset Backed Securities Corp., Lehman Brothers vehicle Amortizing Residential Collateral Trust and a smaller-sized deal from RFC.

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