Bermuda-Asset-backed securities sales are on track to post another year of record growth, fueled by sales of securities backed by high-grade loans and home equity loans.

Until recently, securities backed by credit cards had led sales in this market. This year, however, growth will come from banks repackaging loans to their best customers.

The growth will also come from securities backed by home equity loans. As banks cut back on credit card accounts, they are promoting loans to homeowners who borrow against the equity in their houses.

Sales of new issues could hit $200 billion, including securities backed by banks' commercial loans, according to analysts at Salomon Brothers Inc.

Banks have traditionally turned to the asset-backed market to move credit-card receivables and other consumer loans off their books. They are now doing the same with high-grade, less-profitable corporate loans so they can take the cash and turn it into more profitable lending opportunities. "You're seeing asset-backed technology being used to revolutionize the way banks manage their balance sheets," said Kenneth Phelan, a director at Swiss Bank Corp.'s New York branch.

Banks are finding investors are eager to buy the corporate loan securities because they offer higher yields than conventional asset-backed bonds and aren't as risky.

Securities backed by high-grade corporate loans "are a blockbuster in the market," said Robert Michelle, a money manager for BlackRock Financial Management at a conference on asset-backed securities here.

"It's a worthwhile investment," he said. "You're diversifying from consumer risk to corporate risk."

Securities backed by high-grade bank loans probably will have fewer losses in the event of an economic slowdown than bonds backed by consumer loans. Banks are expected to sell as much as $25 billion of securities backed by high-grade loans and related products through the end of this year. Issuance is expected to reach $40 billion in 1998, Mr. Phelan said.

So far this year, NationsBank Corp. and Swiss Bank led banks that sold $9 billion of securities backed by high-grade corporate loans. Japanese and European banks are planning to do the same with their less-risky, less- profitable corporate loans.

Another source of growth for the asset-backed market will be securities backed by home equity loans.

Companies sold $34 billion of securities backed by home equity loans so far this year, compared with $33 billion for all of last year.

By comparison, sales of credit card-backed securities are trailing, totaling $33 billion so far this year. Companies sold $55 billion of credit card-related securities in 1996, according to Bloomberg Financial Markets.

The nation's utilities are also looking at the asset-backed market. California utilities are planning to sell securities backed by a fee on consumer electric bills by the end of this year. The long-awaited securities have been delayed by political opposition. Utilities are expected to deliver as much as $20 billion in securities backed by utility fees next year, according to Beth Starr, a senior vice president at Lehman Brothers.

The securities will allow utilities to pay for costly investments made in nuclear plants and power lines, and reduce consumer electric rates as they make the transition to compete in a deregulated market. Pennsylvania's Peco Energy Co., which reached agreement with opponents of its deregulation plan this summer, could sell up to $4 billion of this type of security as early as the first quarter next year.

Innovations in the asset-backed market that will also provide growth include securities backed by New York City tax liens and delinquent parking tickets, and so-called disaster bonds, which are sold by insurance companies and whose payments are tied to the likelihood of such natural disasters as hurricanes and earthquakes.

As investors look to buy such a wide variety of assets, they are depending more on research outside the asset-backed domain, recruiting the expertise of utility industry analysts, bank analysts, and specialists in municipal finance.

"There are a lot of new structures coming to the asset-backed market," said BlackRock's Mr. Michelle. "It's important to identify the risk and quantify it. We're relying on a number of corporate specialists."

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