With the creation of the Euro in January 1999, the floodgates were opened for the further globalization of the asset-backed market. The advantages were twofold: As they no longer needed to swap to local currencies, investors abroad developed a much larger appetite for the paper, and U.S. ABS issuers realized the economic advantage of diversifying their funding base by expanding internationally.

Now that market participants are predicting that asset-backed swaps off of U.S. assets going abroad may reach as high as $8 billion this year - increasing from approximately $6.7 billion in 1999 - issuers and underwriters alike are looking to European swap deals and swap providers in an attempt to take advantage of the better execution and savings associated with issuing in Euros.

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