Bonds from benchmark franchise ABS issuer GE Franchise Finance (formerly Franchise Finance Corp. of America) have finally begun showing signs of stress associated with the industry-wide weakness, as Moody's Investors Service last week placed junior notes from three deals on watch for downgrade.

Prior to the acquisition by GE Capital, FFCA was a regular issuer in the ABS market - hailed as a prudent underwriter and sector darling of sorts - managing to avoid the negative headlines garnered by some of its late 1990's competitors. Moody's announcement marks the first time any FFCA securitized bonds have been on review.

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