The first asset-backed securities offering under the Federal Reserve's TALF program met with robust demand on Tuesday, leaving hungry investors clamoring for more of Nissan's $1.3 billion deal.

The deal was four to five times oversubscribed in the first eight minutes that it was announced, said Mike Kagawa, portfolio manager at Payden & Rygel in Los Angeles, who did not get a chance to participate in the sale.

Through its Term Asset-Backed Securities Loan Facility, or TALF, the Fed aims to unclog the consumer loan market and jump-start the fledgling ABS market, nearly shut down by the credit crunch and soaring funding costs last year. ABS supply slumped by 82 percent to $159.8 billion in 2008 and has totaled just over $4 billion so far this year.

Under the plan, the Fed will make loans to investors for the purchase of ABS securities. Once the securities are sold, issuers of bonds will have freed up capacity on their balance sheets to make new loans to consumers.

JPMorgan Securities and Banc of America Securities are underwriting the AAA-rated four-part sale, which includes a 0.32 percent issue offered at a spread of 40 basis points over one-month Libor, a one-year issue offered at 185-200 basis points over eurodollar swap futures and two-year and 3.16 year notes at spreads of 200 to 225 basis points and 325 to 350 basis points over swaps, market sources said.

Other ABS investors agreed the deal met with very strong interest. It quickly came and went, another investor said.

Automakers, which rely heavily on the securitization market for funding of their auto loans, are expected to benefit the most from the plan.

World Omni is also expected to be in the line-up of TALF-eligible auto sales over the near-term, market sources said.

The Fed began accepting loan requests at 10 a.m. on Tuesday and its window for TALF loans will remain open through 5 p.m. on Thursday. The central bank said the TALF program could be expanded from its initial $200 billion amount to as much as $1 trillion.

(Reporting by Nancy Leinfuss; Editing by Dan Grebler)