The market for asset-backed bonds received another boost Tuesday when the year's first security underpinned by residential home loans--a carefully underwritten package of "mortgages for millionaires," in one characterization--came to market.

Redwood Trust (RWT) announced the $280 million residential mortgage-backed security, according to a person familiar with the matter. The bond is backed by a mix of fixed-rate and adjustable-rate mortgages. The average loan size is $978,000 and average FICO, or personal credit rating, score for borrowers is 775.

These are the highest quality loans and investors who once were wary of such mortgage-backed securities can take comfort in the fact that these borrowers are among those least likely to default on their payment.

During the credit crisis, when borrowers with shaky credit defaulted on their mortgages as home prices fell, RMBS were downgraded and the flow of credit withered.

The asset-backed bond market is healthy, with steady issuance so far this year. This market is essential for the flow of smooth credit in the economy and for lowering the cost of borrowing for consumers.

Last year, Redwood sold the first residential mortgage bond since the housing bubble burst, and it attracted strong investor interest.

That deal was composed of particularly attractive mortgages: so-called jumbo loans--those too big to be sold on to government-run mortgage finance agencies--that were made to wealthy borrowers with good credit histories who put more than 20% as down payment. CitiMortgage, a unit of Citigroup, originally made the loans.

Tuesday's bond appears to be similar, comprising jumbo loans and exceptionally high-quality borrowers.

"It sounds like another 'mortgages for millionaires' deal, like last year's," said Paul Jacob of Banc of Manhattan Capital.

Since the credit crisis, the market has been dominated by deals that carry guarantees from Fannie Mae (FNMA), Freddie Mac (FMCC) and Ginnie Mae. While there have been a slew of resecuritizations of existing residential mortgage bonds, investors have remained hesitant to buy a new mortgage issue.

Also on Tuesday, the regulator of credit unions, the National Credit Union Administration, tapped the securitization market with a $840 million note.

The bond is backed by commercial mortgages and is guaranteed by the U.S. government.

The sector of the securitization market that is most robust is where consumer loans like those for vehicles are sold. On Tuesday, Honda Motor Co. (HMC, 7267.TO) announced a $1 billion prime retail auto loan-backed bond.

Other auto sector issuers this month include Ford Motor Co. (F) with a $586 million and Mercedes-Benz Auto Lease Trust with a $750 million asset-backed bond.

Macquarie Equipment Finance also has a $284.5 million three-tranche bond. Barclays Capital is the lead manager on the bond, which is also expected to price later this week.

-By Anusha Shrivastava, Dow Jones Newswires; 212-416-2227; anusha.shrivastava@dowjones.com