The slowing of the economy has recently caused excessive spread widening in the equipment ABS sector, with recent transactions from Navistar, DVI, and CNH Global all pricing at levels that represent a drastic increase in the spread concession compared to secondary auto spreads, a gauge often looked at by ABS investors, according to researchers at Banc One Capital Markets.

The most recent CNH deal came out at the wide end of price talk; the one-year, two-year and three-year pieces, each for more than $200 million, priced decently. But the three-year piece was fixed at swaps +40, which, on a relative basis to the last deal the company did, was about 24 basis points behind comparable autos. In CNH's last deal the three-year was 15 basis points behind autos, so there was a nine basis point spread widening on the three-year.

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