A $10 billion week of U.S new issue ABS supply was cut short last Thursday, as the eastern seaboard was rendered lifeless by a blackout. Many areas in New York were still without electricity as of Friday afternoon's close. The deals that did price experienced some widening, particularly fixed-rate home equity deals, as investors are starting to show their full up on mortgage product. Ironically, arguably the most successful transaction of last week came from electricity provider ONCOR Energy, which priced its stranded cost ABS at the tightest levels the sector has seen to date.
ONCOR's $500 million stranded cost securitization, led jointly by Morgan Stanley and Lehman Brothers, did what no other RRB had ever done - some classes pricing in-line with credit card ABS. It was the second RRB for the issuer, formerly called Reliant Energy, the first of which priced in October 2001.