ABS issuance last week may have reflected a market preoccupied with the pending gathering in Barcelona as well as the American Securitization Forum's annual meeting, which took place mid-week in New York. With roughly $4.6 billion in new-issue transactions, upwards of $884 million of which was still marketing as of Thursday, primary ABS volume was at low ebb.
In real estate, in an unusual twist, the only deal to price throughout the week was the $1 billion MBIA-wrapped HELOC from Wachovia Bank. The single-tranche 3.09-year triple-A rated floater priced at 22 basis points over one-month Libor, compared with guidance in the 21 to 22 basis point range. Meanwhile, Credit Suisse First Boston was still shopping its $309.28 million senior/subordinated transaction via its ABSHE home equity shelf. Merrill Lynch was also circulating its $574.92 million offering from its SURF issuance vehicle for the second week.
Auto ABS priced close to $1.2 billion in new supply for the week, including the first offering from Fifth Third Bank in more than seven years. Fifth Third last sold auto ABS in September 1996.
The $738.62 million senior/subordinated transaction came via Citigroup Global Markets and was backed by prime retail loans. The triple-A rated one-year A1 notes came in on target at four basis points over EDSF. Meanwhile, the two-year triple-A rated A3 notes came in on the tight end at three basis points over swaps while three-year A4 notes came in at four basis points over swaps, respectively - both within indicative talk.
Subprime lender Drive Financial Services also hit with a $437.5 million MBIA-wrapped offering through Wachovia Securities. The two-year fixed-rate triple-A rated A3 notes came in wide at 35 basis points over swaps compared with guidance in the high 20 to 30 basis point range. Similarly, the 3.09-year triple-A rated A4 class came in just within guidance at 40 basis points over swaps, as opposed to guidance in the high 30 to 40 basis point range. The money market tranche priced within guidance at two basis points over four-month Libor compared with guidance in the one to two basis point range.
Credit card activity consisted of a $1.4 billion repackaging from American Express Centurion Bank via Lehman Brothers. The single-tranche offering was backed by the retained C classes of its previous 19 securitizations and marks the first triple-B rated transaction for AmEx. The 2.42-year floater cleared in line with talk at 50 basis points over one-month Libor.
In off-the-run assets, a $100 million offering backed by insurance premiums from Premium Financing Specialists likely marks the last time Banc One Capital Markets will appear on a new-issue ABS transaction. The triple-A rated five-year notes priced at 28 basis points over three-month Libor, out from guidance in the 23 basis point area.
GMAC-Residential Funding Corp. came to market with a $2.36 billion offering backed by U.K. RMBS with two dollar-denominated tranches via Barclays Capital and RBS Greenwich Capital Markets. The roughly $1 billion money market tranche came in within guidance at one basis point under one-month Libor. The triple-A rated 3.10-year A2C notes priced within guidance at 21 basis points over three-month Libor.
While the market is expected to remain fairly slow this week, as many head to Spain, those who remain will see GE Capital's inaugural credit card ABS, which will hit via Credit Suisse First Boston and JPMorgan Securities. In the works since last July, the three-tranche floater will be backed by private-label retail accounts administered on behalf of retailers JC Penney, Lowe's, Wal-Mart (and unit Sam's Club) and Old Navy. - SM/KD
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