Over $11.6 billion in ABS supply hit investors' desks last week, as the home-equity deluge continued. With approximately one month before Thanksgiving, there is no slowdown in sight in terms of issuance. How fast these transactions are executed, however, is another matter.

Top-tier credit card and auto names have had no problem blowing out the door, as recent transactions from Citibank, MBNA Bank America, Sallie Mae and Toyota Motor Credit wrapped up within a day of being announced. Yet down-in credit and headline-risk susceptible deals needed extra work to price.

Citibank and MBNA took advantage of the exaggerated tiering that has developed. Early in the week, MBNA sold $200 million of five-year single-A and $50 million of 10-year triple-B rated floaters as well as $50 million of 10-year triple-B fixed-rate notes. Deutsche Bank Securities led the single-As, while Lehman Brothers led the triple-B notes.

Late in the week, Citibank brought $1 billion of seven-year floating-rate 2002-A8 paper via Salomon Smith Barney. The floating-rate offering priced at par, with a coupon of 19 basis points over one-month Libor.

Thus far in 2002, there has been a lack of seven-year credit card supply. Just three credit card issuers have tapping this segment of the curve prior to Citibank, two of which were bank-card issuers. "Most domestic credit card demand is at the front end, not many credit card issuers issue at that part of the curve," said one investor. "But this is a good trade for both the issuer and investors, who get a nice coupon for triple-A bonds."

On the other hand, more pronounced tiering and negative headlines have forced lesser-known issuers to pay a premium. Despite its single-A credit rating, Household Finance, which recently settled with a multi-state group of state attorney generals and regulatory agencies over non-prime predatory lending issues, coughed up to complete the $559 million credit card ABS that hit the market last week.

Household's 2002-1 deal, led jointly by JPMorgan Securities and Salomon, priced its three-year seniors late the week before last after widening price guidance to 13 basis points over one-month Libor, versus talk in the 11 basis point area. The split-rated (Aa3/A/A+) subs had slightly more difficulty wrapping up. After being pushed to last Monday, the three-year sub class did price, at 65 basis points over one-month Libor, 20 wider than initial talk.

For the second week in a row, a captive finance company stole the show. Toyota's $1.5 billion 2002-C offering, via Banc of America and Morgan Stanley, was the tightest print, on a spread basis, the auto loan sector has seen of late. The most popular class, the three-year floating-rate A4 class, which priced to yield five basis points over swaps, came in inside a recent top-tier credit card deal.

While short-dated A1 paper was retained, the one-year floating-rate A2 class was reportedly four times oversold pricing at two basis points over one-month Libor. For Toyota, coming off an Asian road show, strong demand was reported from Asian central banks. Nonetheless, a wide variety of investors were involved - over 40 - with one-third of the book on the three-year class reportedly of Asian origin.

"As we can see, in this market there is just strong demand for high-quality collateral from a highly-rated issuer," one investor said. Toyota is rated Aa1 by Moody's and triple-A by Standard & Poor's Corp.

Also, triple-A rated Sallie Mae brought its second offering of the quarter and seventh overall student loan securitization this year through Deutsche Bank and JPMorgan jointly. Unlike its 2002-A offering from earlier in the month, 2002-6 was a return to the guaranteed loan product. Sallie priced at the tight end of pre-marketing levels and tightened the 8.7-year Libor-indexed A4L class to price at 18 basis points over three-month Libor, versus guidance in the 19 to 20 basis point area.

This year, Sallie has sold over $10.6 billion of student-loan ABS, $9.9 billion of which has been backed by federally guaranteed collateral. By comparison, Sallie sold $6.1 billion in all last year.

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