The U.S. primary ABS market ground through another week of moderate issuance, as volume came to a moderate $4 billion by press time. Another $300 million or so was expected to price by Friday, bringing production in line with estimates.
While acknowledging that the residential mortgage sector produced fewer deals than it does in an average week, one syndicate source said the week was fairly active, and that he expected the rest of May to produce a lot more. The market got going on Tuesday, with a credit card and home equity loan transaction.
Chase Issuance 2006-A3 came to market with a $1 billion credit card deal, via JPMorgan Securities. That amount was increased from $750 million, and investors eagerly went for the single-tranche AAA-rated deal, which came in at one basis point under one-month Libor.
Fremont Mortgage tapped the market for $1.3 billion through two deals. The Master Asset Backed Securities Trust, a UBS dealer shelf, came to market with $683 million in home equity loan collateral, with UBS acting as lead manager on the deal. Fremont also floated a $698 million in securitization debt, through Fremont Home Loan Trust, with RBS Greenwich Capital acting as lead manager. Ace Securities Corp. floated a $1 billion home equity loan deal, via Deutsche Bank, which owns the shelf. Option One provided the collateral. The senior, two-year tranche piece came in at about 10 basis points over one-month Libor, while the most subordinate tranche priced at about 190 basis points over.
Northstar Education Finance Trust priced a $652 million private credit student loan deal, via Citigroup Global Markets. All of the notes were rated single-A or higher, with the most senior tranche pricing at four basis points over three-month Libor.
Home equity loan issuer RFC- RAAC 2006-RP2 was expected to price a $316 million deal backed by re-performing loans on Friday, via Credit Suisse, with Citigroup Global Markets and Residential Funding Corp. as co-managers. On that deal, talk on the senior tranche hovered at seven basis points over one-month Libor, while the most junior piece was expected to come in at 230 basis points over.
Looking ahead, Bear Stearns was in the market with a $365 million home equity deal; Long Beach Auto Receivables Trust was shopping a $450 million FSA-wrapped deal backed by auto loans; Michigan Tobacco was hoping to price a $496 million tobacco settlement deal; and RFC-RAMP was in the market with a $741 million home equity loan securitization. From across the pond, Granite continued to shop its GBP3 billion transaction, backed by UK residential mortgage-backed securities. Terwin Mortgage Trust was marketing a $900 million deal backed by second liens Price talk on late Thursday hovered around 65 basis points over swaps for the junior, two-year tranche.
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