The primary ABS market returned with vigor last week, pricing over $6.6 billion in new-issue supply. Mortgage-related product led the way with $4 billion of issuance, mostly from bank's acquired collateral issuance vehicles, with credit cards accounting for $1.3 billion. A pair of student loan deals contributed $1.1 billion. Investors were even graced with an insurance premium transaction and a rental fleet deal.

Fresh off the heels of its positive earnings release, Capital One Financial sold a pair of single-A rated sub tranches from its COMET vehicle, both led solely by Barclays Capital. The three-year offerings saw strong demand that led to increases in size, still with the book oversold.

The 2003-B1 and 2003-B2 series, each with three-year average lives, priced at 117 basis points over one-month Libor and 125 basis points over swaps, respectively. The cheap levels had demand totaling upwards of $500 million, despite just $350 million in availability, which was up from the $225 million initially brought to market. The aim of the spreads offered was to address investor concerns over post-pricing performance, sources said, after buyers of the senior 2003-A1 deal last month saw an immediate three basis point tightening in the secondary.

Bank One also tapped the market with sub paper, $100 million of triple-Bs via Banc One Capital Markets. The five-year notes priced early in the week at a level of 114 basis points over one-month Libor.

American Express priced its third securitization of Optima credit card receivables of the year, a $750 million deal via Banc of America Securities and Banc One jointly. Five-year senior notes priced at 11 basis points over one-month Libor, with single-As clearing at 35 basis points over. As per its modus operandi, Am Ex retained the triple-Bs.

American International Group unit AIG Credit priced its annual insurance premium ABS, via Banc One. As was the case with last year's offering, which was restructured to a three-year from a five-year tenor (see ASR 7/29/02), AIG Credit Premium Finance 2003-1 offered three-year seniors that priced at 30 basis points over one-month Libor, outside of guidance in the 25

basis point area.

Auto rental giant Avis Holdings Group sold $750 million of rental fleet ABS jointly via Banc of America and Banc One. Backed by a full FSA wrap, the 2.84-year A1 class priced at 36 basis points over one-month Libor, inside of guidance in the 38 basis point area. The three-year A2 also tightened from premarketing guidance, pricing at 23 basis points over one-month Libor, versus talk in the 25 basis point area.

In student loans, graduate-school lender The Access Group priced two deals, one backed by FFELP guaranteed collateral and the other backed by privately made loans, made primarily to law school students (see story p. 6). The FFELP deal, series 2003-1, led by Credit Suisse First Boston, was restructured slightly, saw its three-year A1 class price at six basis points over three-month Libor. The restructuring - which entailed folding the $200 million eight-year A3 into the $100 million five-year A2 to create a $300 million six-year A2 tranche - priced at 26 basis points over three-month Libor. The remainder of the $669 million offering was in auction-rate bonds. The private loan-backed 2003-A, via the education finance group at UBSWarburg, priced its 5.7-year term A1 tranche at 43 basis points over three-month Libor.

Mortgage issuance centered largely on investment bank principal finance vehicles, with units from Bank of America, Lehman Brothers and Morgan Stanley all pricing deals. Also, AmeriQuest Mortgage sold $1.1 billion of paper through Citibank and UBSWarburg, its sixth ABS of the year. The bulk of the AMSI 2003-6 was placed prior to pricing, but the 2.5-year AV3 tranche priced at 32 basis points over one-month Libor. Down in credit, the 5.2-year triple-B plus M4 and triple-B M5 notes priced at 300 basis points and 400 basis points over one-month Libor, respectively.

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