New issue supply increased substantially last week as the more traditional sectors all saw top-tier names re-enter the primary. Following just $9 billion of supply in the previous two weeks combined, last week saw roughly $8.7 billion price with particularly strong representation in the auto loan and credit card sectors.

The top names in the auto sector were out with billion-dollar-plus offerings as BMW Motors, American Honda Finance and Toyota Motor Credit had no problem finding buyers for the super-prime collateral backing their respective deals.

In cards, reverse inquiry interest brought in the sector leaders Citibank and MBNA Bank America, while Bank One officially joined the ranks of the sector benchmarks with its first senior offering from its Bank One Issuance Trust delinked issuance vehicle.

With no prime captive issuance since the week of April 15, demand had built to a crescendo that had all three of last week's auto deals subject even before price guidance made it out. As a result, spreads came in very tight for each of the deals, BMW being the winner in the three-horse race. Banc of America and Deutsche Bank Securities jointly led the 2002-A deal.

BMW priced through all of the auto loan transactions seen so far this year, and approached comparable credit card and student loan-backed levels. The money market eligible 2a7 A1 class cleared at five basis points under four-month Libor and one-year A2 notes priced to yield five over EDSF. Two and three-year paper performed just as well, with each class yielding just four basis points over comparable swaps, respectively.

In addition to the high credit quality of the typical BMW driver (average loan balance is only $27,917 with average APR of 6.54%) and the strong first-quarter performance of the parent, the scarcity value of the name had investors tripping over themselves to secure their desired allocations. "BMW tells the market up front, this will be the only offering of the year," noted one investor who bought in on this deal. "If I don't get any this time around, I won't be getting any."

Coming just behind BMW was Honda, which saw similarly strong demand at spreads 1bp outside of the Beemer trade. Toyota meanwhile priced on top of BMW in its one- and three-year senior classes but in line with Honda on two-year paper.

All three deals saw demand up to four times greater than available supply, with the strongest interest further out on the curve. Approximately 20 accounts were involved in each of these deals and most of the names were the same throughout, banker sources said.

In credit cards, Bank One's first triple-A-rated senior offering from its new issuance vehicle ended the month-long wait since plans to unveil this platform in March were announced at ABS West. Bank One saw strong demand for its five-year offering, giving it the option to either tighten pricing levels or double the deal's size. Bank One chose the latter, pricing an even $1 billion of five-year paper at 11 basis points over one-month Libor.

Citibank and MBNA each brought surprise offerings, Citigroup with a three-year fixed-rate and MBNA with a seven-year floater. Citigroup completed its deal at a spread of four basis points over swaps and MBNA priced at 18 over on-month Libor.

Late in the week GMAC-RFC brought $1 billion of Ambac-wrapped subprime first lien MBS via Bear Stearns from its RASC shelf. The 2002-KS3 deal offered investors only $500 million of 2.67-year A2 notes, as half of the supply was pre-placed to an unspecified agency. The A2 class priced at 25 basis points over one-month Libor.

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