Differences in credit fundamentals - and the speed at which they are expected to change - should mean that ABS CDO spreads will begin to widen out much earlier, and faster, than spreads in the CLO space, Bear Stearns analysts said last week.

The analysts assumed that the market seems to be with them on this point: Spreads on triple-B ABS CDOs have generally averaged above 300 basis points since late last year, while triple-B CLO spreads continue to tighten, according to Bear.

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