The U.S. ABS market continued at a modest pace last week, pricing roughly $9 billion in new-issue supply, focusing on either the mortgage-related or student loan sectors of the market. Aside from a pair of off-the run deals, there were no other asset classes represented throughout last week.
Numerous infrequent issuers made the rounds, however, with a first-time mortgage lender, an infrequent student lender and the second-ever term securitization from the joint venture between General Electric and Seaco. Also, Citibank N.A. priced a 12b-1 fee ABS.
With $5.5 billion, the home equity sector was relatively slow, although investors did get to welcome a new issuer to the market - People's Choice Home Loans Inc. Frequent issuer AmeriQuest Mortgage completed a pair of deals from its Argent Securities wholesale originations shelf and Long Beach Mortgage priced its second ABS of the year. Terwin Mortgage Securities continued quietly leaking supply into the market with its fifth deal of the year.
With the exception of Long Beach Mortgage Loan Trust 2004-2, which priced right in line with price guidance, spreads were mostly softer for mortgage paper throughout the week, particularly for subordinated classes. Argent's series 2004-W8 triple-B rates M8 class cleared at 275 basis points over one-month Libor, 10 basis points outside of guidance, with the triple-B minus bonds pricing at 465 basis points over Libor.
People's Choice's $501 million series 2004-1 offering, via Lehman Brothers, priced outside of guidance across all classes, with widening ranging from two to seven basis points. The 2.4-year triple-A rated 2A class priced with a coupon of 30 basis points over one-month Libor.
In student loans, Access Group Inc. priced a pair of deals, one backed by FFELP guaranteed loans and one by alternative loan product. Deutsche Bank Securities led the $468 million series 2004-1 FFELP deal, while UBS led the $771 million private loan transaction.
Nelnet was also seen last week, with its second FFELP loan securitization of the year, via JPMorgan Securities and Morgan Stanley. Unlike rival Sallie Mae, Nelnet was unable to price its one-year triple-A class sub-Libor, although it did manage to price flat to three-month Libor. Three- and five-year notes priced at three and 10 basis points over Libor, respectively.
In esoteric assets, Citibank N.A., the last remaining 12b-1 fee ABS issuer, completed its first such deal of the year. The $331 million double-A rated series 2004-1 offering, with a 12-year final maturity, priced at 135 basis points over one-month Libor - 10 basis points inside of the November 2003 series 2003-3 deal.
Marketing last week, the $500 million GE Seaco container lease deal, via Wachovia Securities, should price sometime this week. The single-tranche, floating-rate Ambac-wrapped offering, with a five-year average life, had yet to see official price guidance released as of press time. GE Seaco's first offering, a $300 million five-year 2002-1 deal, which came in November 2002, priced at 60 basis points over Libor.
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