Standard & Poor’s issued a new report yesterday that looked at securitization trends in the closed-end, second-lien (CES; read: primarily subprime) and the home equity line of credit (HELOC) markets — one is soaring, while the other is wilting under the subprime credit crunch. From the S&P press release:

Standard & Poor’s rated 23 CES securitizations with issuance volume of $11.12 billion in the first quarter compared with 24 CES transactions and $13.54 billion in issuance volume during the previous quarter. “While CES securitization volume slumped only slightly in first-quarter 2007, we anticipate further declines over coming quarters,” said Standard & Poor’s credit analyst Justin Hansen, a director in the Residential Mortgage-Backed Securities Group. Falling investor demand for 80/20 mortgage products is partly behind the drop. “Cautious investors, spooked by news of early payment defaults, have also led issuers and originators away from lower-documentation, second-lien mortgage products,” Mr. Hansen said. In contrast to the flat CES market, HELOC issuance bounced back to $7.28 billion during first-quarter 2007 from $3.90 billion the previous quarter. This represents a total of 10 HELOC deals issued, doubling the five in fourth-quarter 2006, but in line with previous quarters.

The full commentary is available to subscribers of S&P’s Ratings Direct service.