Monoline insurers have acquired a higher profile in European structured finance markets, and at the Global ABS conference in Barcelona they were hailed as the unsung heroes of this business. Increasingly, however, market players are asking if wraps are worth the reduced spread margins.

"In the case of execution, especially with a new transaction, having a monoline wrap certainly makes it a lot easier to get the deal done," said one market source at the conference this year. "But as an investor you must recognize that you are buying a single-A piece that was wrapped triple-A. Most will still look at the underlying, because there is a need to get comfortable with the deal on an unwrapped basis."

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