On the heels of Moody's Investors Service following suit last week and downgrading the corporate unsecured ratings of Ford Motor Co. and Ford Motor Credit, the auto ABS sector is primed and ready to receive the tidal wave of issuance expected from the beleaguered Big-Two as those companies are forced to turn away from the corporate debt markets for funding.

Moody's action on Ford came one week after both Ford and General Motors' corporate debt ratings were downgraded to junk status by Standard & Poor's, and the picture is not likely to get better any time soon. The two manufacturers are already finding unfavorable pricing in the corporate unsecured market, and sources are predicting the two could issue a combined $60 billion in various ABS asset classes by the end of the year. The good news is that the market seems to have the capacity to absorb that extra supply without seeing spreads widen prohibitively or scaring smaller issuers out of the market.

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