The ABX reports released late Friday showed 60+ delinquencies increasing, although at slightly slower rates. Analysts from Merrill Lynch attributed the rise to seasonality. The delinquency increase for the ABX indices was expected and is based on the roll rates and the 30-59 and 60-89 day delinquency pipelines. However, the pace of increase in 60+ day delinquency levels seems to be slowing.

The likely reason is simple seasonality based on tax rebates that arrive in the spring, analysts said. The effect is obvious looking at the ABX 06-1 index both currently and one year back, Merrill said. Of course, this does not necessarily indicate better performance, despite the better numbers, Merrill analysts said.

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