The U.S. ABS primary market snapped to attention last week with close to $11 billion priced as of Thursday's market close. Real estate ABS alone was good for roughly $5 billion of the total, as the auto sector also showed strength.
Morgan Stanley hit with a $1.32 billion home equity deal off of its MSAC dealer shelf. The transaction priced largely in line with expectations, although there was some widening down in credit. The 5.22-year triple-B rated notes came in at 195 basis points over one-month Libor versus guidance of 190 points over Libor.
Accredited Home Lenders Inc. was in the market with its first senior/subordinated transaction (see related story p. 4). The $997.46 million 2004-3 offering came via Lehman Brothers. The triple-A rated 5-year fixed-rate notes priced five points outside of guidance at 110 basis points over Swaps, with the 7.83-year triple-A class also widening to price at 119 points over swaps compared to guidance of 115 over.
The opposite was seen down in credit, as the 6.16-year fixed-rate triple-B rated notes tightened to clear at 200 points over swaps versus talk at 205. Meanwhile, the 5.12-year triple-B rated floaters also came in on the tight side of guidance at 350 basis points over one-month Libor versus guidance in the 350 to 375 basis point range.
Credit Suisse First Boston led two mortgage related transactions last week, the first being an $899 million RAMP 2004- RS8 offering from GMAC-Residential Funding Corp. The triple-A rated five-year fixed notes were slightly tighter at 113 basis points over swaps relative to guidance in the 115 basis point area over, while the 5.65-year triple-A floaters were on target at 50 points over one-month Libor.
Auto ABS stepped on the gas last week pricing upwards of $2.6 billion by week's end. Wachovia Securities showed up with three lead mandates in the sector, one of which was joint with Deutsche Bank Securities. The jointly led transaction was the $800 million offering from AmeriCredit Corp. backed by nonprime retail loans and fully wrapped by Ambac - the first time AmeriCredit has employed Ambac. The transaction priced tight with the 2.05-year triple-A rated notes coming at 16 points over swaps versus guidance in the 18 basis point area over.
Wachovia also led a $450 million XLCA wrapped transaction from Onyx Acceptance Corp., backed by nonprime retail loans as well as leading a $100 million Rule 144A wholesale dealer floorplan-backed offering from Credit Acceptance Corp., backed by a Radian guaranty and a backup wrap by XLCA.
Close to $2 billion came in the credit card sector last week. Capital One Financial Corp. hit with a $150 million COMET 2004-B4 transaction via Morgan Stanley. The 4.96-year triple-B rated notes priced on target at 65 basis points over one-month Libor.
Citibank N.A. tapped the market for $1.75 billion in a triple-A rated, single tranche fixed-rate offering. The deal, increased in sixe from the initial $1.25 billion, came one basis point inside of price talk to yield one basis point over swaps, or 3.220%.
Sallie Mae priced a $1.25 billion transaction via joint leads Merrill Lynch and Morgan Stanley backed by FFELP loans. The deal came in-line with guidance across the credit spectrum, with triple-A rated three-year notes clearing at two basis points over three-month Libor, at the tight end of talk in the two to three point range. Meanwhile, the 11.6-year double-A-plus rated B class hit at 46 points over one-month Libor compared to guidance in the mid 40 point area.
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