Secondary trading in prime RMBS remains solid, said market sources, indicating the preference for high quality consumer receivables in the market right now. Granite 2002-2 securitization, for example, saw good secondary market trading for both Euro and Sterling tranches. "Initially we thought that the substance of support would be much broader, but it looks like deals that are off-the-run are also off the track," said one market analyst.

According to the Royal Bank of Scotland, off-the-run names are finding it particularly difficult to access the market. While a few CDOs have been placed, they are said to have priced wider than anticipated. "Investor confidence in non-bulleted or subordinated tranches is flagging, leading to three R's: restructuring, repricing and remarketing just prior to launch," said the bank. "The market appears of two minds."

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