A mountain of ABS supply hit the U.S. primary market last week, following the holiday-shortened session of trading the prior week. As of last Thursday's close, with $16.5 billion having priced on the week, the market was awaiting a few more pricings - including a massive global U.K. MBS - that could send the weekly total to more than $24 billion.

The home-equity sector once again enjoyed a strong week of new issuance, with roughly $10 billion having priced throughout the week. Just about each underwriter's home equity shelf priced a transaction, including a first timer, as did numerous third-party issuers.

Home equity deals seen throughout last week included offerings from Countrywide Home Loans Inc., Centex Homes and Long Beach Mortgage. Terwin Mortgage priced an offering via its internal Terwin Capital underwriting unit and IndyMac Mortgage priced a home equity line of credit ABS that priced at just 12 basis points over one-month Libor.

As usual, shelf transactions dominated the landscape, with Banc of America Securities, Bear Stearns, Credit Suisse First Boston, Deutsche Bank Securities and Merrill Lynch each pricing acquired collateral transactions last week. Also, the long-awaited home equity shelf from Barclays Capital hit the market, pricing at the tightest levels amongst its peer group. For example, the SABR 2004-OP1 A2 class, with a 2.7-year average life, priced at 25 basis points over one-month Libor, inside of rivals ACE, HEAT and MSAC comparable classes.

It was another strong week of auto loan issuance, with nearly $4.5 billion, despite yield spreads just barely on the positive side of their benchmarks across the yield curve. A pair of credit card issuers tapped the market for roughly $4.5 billion.

The story continued to be the strong demand in the auto sector that has even translated into non-prime offerings pricing in the single-digit area over their benchmarks. Prime names, meanwhile, are flying out the door, going subject and pricing just hours after being announced.

Both prime offerings last week from DaimlerChrysler and USAA priced the one-, two- and three-year classes to yield two basis points over EDSF and comparable swaps, respectively. In non-prime action, Wells Fargo's first non-prime auto ABS ever priced, without a wrap, at five and eight basis points over EDSF for one- and two-year paper, respectively. Three-year notes priced to yield 12 basis points over swaps.

Also, Long Beach Auto Acceptance's largest sub-prime securitization to date, $300 million of FSA wrapped 2004-A paper, was oversold within one hour of being announced Wednesday, sources close to the offering said. After shortening of average life, First Tennessee Bank's $150 million prime auto ABS on behalf of Security Service Federal Credit Union was completed.

Early in the week, MBNA America Bank sold the longest-dated credit card ABS the market has seen since 1997, when it completed its $700 million 15-year triple-A floater at 26 basis points over one-month Libor. The deal was increased from the initial $500 million as well as pricing inside of price guidance in the 27 basis point area over Libor.

Late in the week, Chase Manhattan Bank brought a $1.5 billion three-year floater that also was increased in size. The triple-A class priced at three basis points over one-month Libor, in line with the previous week's three-year senior floater from Bank One N.A.

Sallie Mae wrapped up its second student loan ABS of the year, a multi-currency deal that totaled $2 billion (US$ equivalent) and even ventured into sub-Libor territory. The one-year A1 class priced at one-basis point under three-month Libor, with the three-year A2 class printing at three basis points over Libor.

The mammoth U.K. MBS in the market from HBOs' Permanent Financing No 4, totaling $6.1 billion in U.S. classes and $3.5 billion in Euro and Sterling paper was set to price Friday, after weeks of marketing and planning. Should it wrap Friday as expected, it would push weekly supply past the $20 billion threshold.

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