The U.S. ABS primary market put up solid numbers last week, pricing upwards of $8 billion as of Thursday's market close, and close to $6 billion still making the rounds heading into Friday.
For the second week running, the real estate sector priced upwards of $5 billion to dominate the ABS new issue landscape. Credit Suisse First Boston, Barclays Capital, Merrill Lynch and Deutsche Bank Securities were all in the market with dealer shelf transactions.
CSFB priced $567.19 million off of its ABSHE home equity vehicle. The deal hit on target throughout the credit spectrum. The 4.64-year double-A rated notes priced at 65 basis points over one-month Libor, while the triple-B minus class with a 4.41-year average life came at 310 points over Libor.
Barclays Capital tapped the market for $295.53 million off of its SABR shelf. The 5.21-year mezzanine notes priced at 112 points over one-month Libor. Little else within the capital structure was disclosed.
Deutsche Bank was in the market with a $1.56 billion offering via its ACE Securities vehicle. Investors showed a hearty appetite for mezzanine paper, bringing three classes to come inside of expectations. The class M1 notes with a five-year average life priced at 62 basis points over one-month Libor versus talk at 65 points, while the 4.96-year class came in at 67 points over Libor relative to guidance at 70 points over Libor. The 4.93-year notes were also inside at 72 points over Libor versus guidance at 75 points over Libor. Pricing gapped out down in credit with the single-A plus rated class M7 notes coming in at 185 points over one-month Libor versus guidance at 160 points. Meanwhile, the single-A minus 4.87-year notes priced at 235 basis points over one-month Libor after being talked at 220 points over Libor. Standard and Poor's was the only agency to rate these classes.
Merrill Lynch was in the market with its $390.42 million MLMI 2004-OWN1 transaction. The 2.10-year triple-A rated notes were slightly outside at 38 points over one-month Libor relative to talk at 38 points over.
CDC IXIS was in the market with a $700 million offering via Morgan Stanley. The triple-A rated 3.01-year senior notes hitting at 34 basis points over one-month Libor. Meanwhile, the triple-B rated B2 class with a 5.29-year average life priced at 185 points over Libor.
As usual, Countrywide Home Loans was in the market last week with a $735.7 million offering. The transaction came largely in line with expectations, with the 6.53-year senior notes came with guidance at 53 basis points over one-month Libor. The bonds cheapened down in credit with the 4.76-year mezzanine notes coming in at 375 points over one-month Libor compared to talk at 360 points over Libor.
GMAC-Residential Funding came with $1.25 billion RAMP RS series offering backed by program exceptions via lead manager CSFB. The 2.20-year senior fixed rate notes priced inside at 60 basis points over swaps relative to talk at 65 points over swaps. Meanwhile, senior floaters with a three-year average life priced with expectations at 34 basis points over one-month Libor. Down in credit, 4.15-year single-A minus floating notes came outside of expectations at 145 basis points over one-month Libor versus talk at 140 points over Libor.
The credit card sector priced just shy of $2.5 billion for the week, including the first senior/subordinated offering from The Metris Companies in three years (see ASR, 10/25/04). The $600 million offering, upsized from an initial $300 million, was well received by investors and priced tight throughout the capital structure. The 1.96-year triple-A rated notes hit at 15 basis points over one-month Libor relative to guidance in the 16 to 17 point over Libor area. The subordinates of the same duration were also inside at 135 points over Libor relative to guidance in the 145 basis point area over Libor.
"This was an important transaction for Metris, given that it was our first public senior/sub transaction since 2001," said Metris Treasurer Scott Fjellman. "We will look to be a more active issuer in the ABS market during 2005 and 2006."
Capital One Financial tapped the market with a $500 million delinked offering via joint leads Morgan Stanley and RBS Greenwich Capital. The triple-A rated 6.94-year notes priced with expectations at 13 basis points over one-month Libor.
Morgan Stanley was also in the credit card sector with its own $1.32 billion offering from its Discover Master Card Trust. The 2.95-year triple-A rated notes came with guidance at three basis points over one-month Libor.
AmeriCredit Corp. was the only auto issuer to tap the market last week with its $750 million offering backed by nonprime retail loans and wrapped by FSA. CSFB and UBS shared the mandate, marking UBS' second subprime auto lead mandate. The 2.15-year notes priced tight at 11 basis points over swaps relative to talk at 12 points over swaps. The A4 class with a 3.40-yea average life was on target at 19 basis points over swaps.
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