Hybrid issuance has declined as a result of the flatter yield curve and banks retaining the originations in their portfolio, analysts said.

In recent research, for example, Credit Suisse analysts noted the decline in Countrywide's share in both agency and non-agency paper, which has contributed to the overall decline in hybrid issuance. They point out that in the second quarter of 2004, Countrywide's share of agency hybrid issuance was 46% compared to 21% in the first quarter of this year. Furthermore, the drop in Countrywide's market share of non-agency is less obvious while the declining market share of issuance is seen throughout hybrid reset types.

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