The primary U.S. ABS market made a return to loftier volume levels last week to price close to $9.5 billion as of Thursday's market close. The real estate sector made up the bulk of total volume with $6.5 billion in new issues.
Delta Funding Corp. tapped the market for $728 million via Citigroup Global Markets and Friedman Billings Ramsey. The three-year triple-A rated floaters priced wider than expected at 22 basis points over one-month Libor versus guidance in the 20 basis point area over one-month Libor. The three-year fixed-rate notes were similarly outside of expectations, also pricing at 22 points over swaps relative to talk in the 20 basis point area over swaps. Spreads tightened down in credit, with the 5.48-year mezzanine notes clearing at 95 basis points over swaps, versus guidance at set in the 100 basis point area over swaps. The triple-B rated notes, with a 5.47-year average life, came in to price at 150 basis points over swaps versus guidance in the 155 basis point area over swaps.