The story of last week - and of 2014 for that matter - is prime mortgage-backed securities issuance. As reported on Friday, ME Bank last week launched a A$500 million prime RMBS issue and priced a $1.4 billion transaction, with the tightest pricing seen since the GFC.As a result, prime RMBS issuance stands at $17.9 billion for the year to date. Issuance for calendar 2013 came to just $23.4 billion and was the largest annual volume since the GFC.The contraction in credit spreads in the structured finance sector is consistent with the contraction observed in credit markets generally, as investors continue to search for yield. The average credit spread paid on Class A notes this year is 89.7 basis points, down from 106.1 bps last year and a peak of 148.8 bps in 2012.Margins at this level mean smaller home loan funders can give big banks a run for their money.It is not just the mortgage-backed securities market where pricing is tight.In the domestic corporate bond market, ANZ (rated AA-) last week sold $1.35 billion of five-year floating rate notes and $400 million of five-year fixed rate notes. The floating rate issue was priced at 82 bps over bank bills/swap.The pricing for unsecured bank debt is the lowest seen for five-year funding for a major bank so far this year, but still lags the 78 bps achieved by NAB in May last year - just before the markets' taper tantrum.In other capital market activity last week, Inter-American Development Bank (rated AAA) was the only other issuer, selling $350 million of February 2020 bonds, at a spread of 40.2 bps to Commonwealth government bonds. In New Zealand, Auckland International Airport (rated A-) ventured into the traditional private placement market in the US, to raise US$250 million for 12 years. The bonds will yield 3.61 per cent per annum and were reportedly swapped back at 125.5 bps over bank bills.The deal completes the funding of the NZ$454 million capital return that the airport made in April and was hailed by the airport's chief financial officer, Simon Robertson, as being the tightest priced issue by a New Zealand company in the US private placement market in the last decade.