The U.S. ABS market was led last week by a trio of top-tier issuers, as sector benchmarks Sallie Mae, Saxon and MBNA all brought deals. As has been the case early this year, investors have had a strong bid for leading issuers, as deals priced in line with guidance. The primary market priced $3.3 billion last week, down from the $5.2 billion in a flurry of post-Arizona supply, as numerous bid lists circulated.

The top deal of the week came from USA Education, issuance arm Sallie Mae, selling $1.53 billion of 2.5-year, 7.3-year senior and 11.5-year single-A-rated floaters through Credit Suisse First Boston and Merrill Lynch, jointly. The $873.95 million A1 class came in at three basis points over three-month Libor with the $615.7 million A2s pricing at 11 over, each at par. The single-As priced at 47 basis points, also over three-month Libor.

This was just the second offering for Sallie backed entirely by a pool of loans indexed to 90-day commercial paper rates, rather than three-month T-Bills, and was structured similarly to the 2001-4 offering from last November. This offering, according to Guido van der Ven from USA Education, priced inside of 2001-4.

The CP-indexed collateral has helped Sallie get tighter spreads in its last two deals, as all in the sector cite the reduced basis risk between Libor and CP rates. "There is a very stable relationship between Libor and CP; the switch has been good for both student lenders and borrowers," said van der Ven. "The federally insured collateral is the best in the whole market," he added.

In the home-equity sector, Saxon Asset Securities completed its largest deal to date, selling $900 million of 2002-1 paper through Greenwich Capital. This was the 22nd term ABS the issuer has sold since 1996 but only the third since being divested from utility Dominion Resources last July.

Saxon priced well inside of GMAC-RFC, in the comparably tenured tranches, pricing 0.9-year, one-year and three-year seniors at yield spreads of 14 over one-month Libor and 50 and 55 basis points over Swaps, respectively. While the most recent RAMP RZ1 deal, that priced on Valentine's day, was high loan-to-value collateral, Saxon came in five, 18 and 13 inside of GMAC-RFC.

As is typical for Saxon, there was no deep MI in the pool, as the economics do not agree with buying insurance right now and investors are full up on it in general. But, as noted by senior vice president of capital markets, Brad Adams, "Deep MI is inconsistent with our franchise value, managing credit risk." Adams added that since using it in a small test pool years ago, Saxon has not offered deep MI-backed collateral in years.

It was business as usual for credit card issuer MBNA, which sold $500 million of subordinated credit card paper from its de-linked "MBNAseries" master note trust. The top monoline issuer sold $250 million each of fixed-rate single-A-rated five-year and triple-B-rated 10-year notes.

For these offerings, MBNA chose Lehman Brothers to lead the single-A B1 and JPMorgan to lead the triple-B C1 tranches. Each offering had the same co-manager syndicate.

The five-year single-As priced at 43 over and the 10-year triple-Bs priced to yield 138 basis points over comparable Swaps, respectively. While the single-As priced in line with guidance, the CDO bid remains strong and the triple-Bs moved in from initial talk in the 140 to 145 basis-point range.

This follows the sale of $1 billion of five-year fixed notes that priced Jan 23. With the 15% enhancement levels for MBNA, these subs can support $7.5 billion of senior notes for future issuance.

Late in the week, Banc of America was marketing a $240 million RMBS-backed deal for C-BASS, which saw the subordinated tranches price Thursday before the remaining $190 million senior class was restructured into three classes: $50 million of two-year A1A, $117.5 million of 1.75-year super-senior A2A and $20.7 million of 3.5-year mezzanine-senior A2B floaters. Pricing was scheduled for Friday.

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