The asset-backed market posted its best year of relative value in 2003, according to returns tracked by researchers at Lehman Brothers. However, it was trounced by the unsecured credit market, which also enjoyed its best year to date. Driven by massive tightening in numerous sectors, The Lehman ABS Index returned 179 basis points of excess return versus Treasurys, Lehman reports, compared to the 310 basis points of returns seen in unsecured debt last year.

Beset by record-setting mortgage refinance activity, the MBS market was outshone by ABS by a 168 basis point margin.

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