By Lang Gibson, Director of Research, Structured Credit Products, Banc of America Securities

The year 2001 will go down as the first real test period for structured credit products, particularly those backed by corporates. Although long-term interest rates ended the year essentially unchanged, credit risk was seriously tested in all markets - especially in the post-Sept.11 period. Nevertheless, by the end of the year, spread levels in the most liquid credit markets were significantly tighter than they were at the beginning of the year discounting an economic recovery for the nine-month old recession.

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