On the news that Prudential Securities was paring its fixed-income businesses - and eliminating as many as 400 positions at the firm - spreads on home-equity asset-backed securities widened as much as 10 basis points, according to research from First Union Securities.

Not only was Prudential a major provider of liquidity for the sector, but the firm has been among the top three lead managers for home-equity deals since 1994.

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