With the inaugural offering of CARSS 2004-1, Banc of America Securities did in autos what it successfully pioneered in the MBS market - a synthetic default recourse transaction to bifurcate and sell off the risk of a portfolio of consumer loans. As with BofA's Resi Finance LP program, which has issued seven securitizations totaling a nominal $105 billion, the $3.89 billion CARSS deal is structured to remove the credit risk of the collateral backing the single-A through single-B rated classes, retaining the high investment-grade risk.

Similarly to Resi, BofA is expected to bring similar synthetic auto transactions in the future, while other investment banks, with commercial banking entities, are not expected to follow suit.

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