Ford Motor Co.'s unsecured corporate debt actually tightened on the news that Standard & Poor's downgraded it to BBB-'. According to bank analysts, removing Ford from negative watch was more significant than the downgrade, as it wiped out the fear that Ford would slip below investment grade, at least for the near term.

While there was little trading reported, Ford ABS would, at most, trade one basis point wider from the corporate downgrade, said one syndicate official. "If they were to bring a deal next week, it would fly out the door," the official said.

"This serves to underscore some of the remaining vitality that still exists in the unsecured market, once again showing some of the event-related protection that ABS provides," said Peter DiMartino of RBS Greenwich Capital.

According to research from UBS last week, Ford Motor Credit's term issuance, at $8.35 billion through early November, is slightly down from last year's pace. In 2002, Ford issued a total of $14.6 billion.

Another analyst noted that Ford Motor Credit has other funding mechanisms outside of the term market, such as whole loan sales and its ABCP conduit FCAR. For example, Ford collateral made up about $630 million of the $2.7 billion backing Bear Stearns Whole Loan Auto Trust 2003-1, which priced in late September.

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