After sleeping through August, the asset-backed-securities market woke up last week - with issues of credit card receivables leading the way.

Approximately $9 billion in asset-backed securities were issued. First Chicago NBD Bank culminated the activity by offering $900 million in credit card-backed securities.

The offering, which is being underwritten by Salomon Brothers, was priced 13 basis points above the London interbank offered rate.

First Chicago NBD is the nation's sixth-largest credit card issuer, with $17.8 billion in outstanding credit card accounts. Moody's Investors Service, Standard & Poor's Ratings Group, and Fitch Investors Service each gave the issue their highest rating.

Other significant credit-card offerings last week included $1.25 billion from American Express; $1 billion from MBNA America Bank; $930 million from AT&T Universal Card Services; and $850 million from Case Credit Inc.

In the two weeks before these offerings, the asset-backed securities market had been quiet, with only three deals priced for a total of slightly over $1 billion, according to Prudential Securities.

Karen Wagner, analyst at CS First Boston, said she expects the flurry of offerings to continue through the end of October.

"The market has received these offerings very well," she said.

Ms. Wagner said that though "everybody has read the same stories about credit problems" consumers face, she didn't think that such problems have had any impact on the securitization market.

She said the AAA ratings routinely awarded by the agencies give investors confidence about these credit card-backed issues.

She attributed much of the recent activity to interest from European investors returning from their summer vacations eager to do business in American markets.


In response to rising credit card chargeoffs, Fitch Investors Service Monday launched a Credit Card Performance Index on $140 billion of credit cards.

The index tracks performance on a monthly basis by calculating the weighted average annualized chargeoff rate for all credit card securitizations followed by Fitch. This universe includes the top 10 consumer credit card issuers, as well as many smaller players tracked by Fitch since 1990.

Nonpayments by credit card users are approaching the highest in five years, the index shows. Chargeoffs spiked upward to 5.48% for the month as of July 31, from 3.88% a year earlier. The five-year high of 6.25% was reached in June 1992.

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