After a quarter-end push, followed by a two weeks of issuance dragged down by two major holidays, the asset securitization market began to chug back to life again last week. Market players expected primary issuance to hit around $12 billion for the week, about half of which priced by press time last Thursday.
Aside from the usual suspects, last week's issuance pipeline featured several tightly priced auto and credit card sector transactions. The COMET 2006-A13,a credit-card deal, came to market via Banc of America Securities. The bank snagged pricing at two basis points below the one-month Libor, on the deal's only tranche, a triple-A rated 2.99-year piece.
In the small business card sector, co-lead managers Merrill Lynch and RBS Greenwich Capital ushered a couple of Advanta Business Card Master Trust transactions to market, together totaling $450 million. Series 2006 A-5 with a 2.99-year average life priced flat to swaps. Meanwhile, investors in Series 2006-A6 with a 3.99-year average life did a little better - at a whopping three basis points over the one-month Libor.
Not to be outdone, the home equity loan sector offered up the $698 million self-led Nomura Home Equity Loan Trust. The one-year, triple-A rated bonds held the line on spreads at six basis points, while luring investors to the triple-B rated tranches with yields up to 875 basis points over. C-BASS came to market with a $558 million transaction, via Merrill Lynch. The two-year, triple-A rated priced at 11 basis points over the one-month Libor, while the 4.35-year bonds, rated slightly above investment grade bonds came in at 72 basis points over the same benchmark.
The HSI Asset Securitization Corp Trust came to market via HSBC Securities, Countrywide Securities and Blaylock. That deal achieved slightly tighter spreads on its one-year, triple-A rated piece, at five basis points over the one-month Libor, while investors who picked up the 4.15-year, triple-B rated tranche were rewarded with spreads at 230 basis points over Libor.
Market players expected subdued issuance for October, in anticipation of Information Management Network's ABS East conference in Orlando next month.
"We're not going to see too many $20 billion-plus weeks going forward," one market source said.
Also, Allegheny Power, which planned to issue $365 million in ABS bonds to finance an emissions control facility at a West Virginia power plant, asked the Public Service Commission of West Virginia to increase the securitization amount to $573 million.
Meanwhile, some market players were still scratching their heads over Nomura Securities International's decision to reorganize its mortgage-backed securities business last week. The Japanese bank shut down trading in new-issue and secondary market agency mortgages, and appears to be pinning its mortgage-related growth prospects on synthetic CMBS, plus RMBS and CMBS repurchase agreements. It also created Nomura America Mortgage Finance, a holding company that will help the firm expand its commercial and residential mortgage originations and purchases, as well as create an asset management platform. That business will continue to operate through Nomura Credit and Capital, and the new company will own it. Donald MacKinnon, a managing director there, will lead the newly created subsidiary.
(c) 2006 Asset Securitization Report and SourceMedia, Inc. All Rights Reserved.