With the euro-denominated tranche of HBOs Permanent Financing bid slightly below par, market sources say the hefty upcoming pipeline is beginning to weigh on the market. Investors are monitoring secondary market activity to get some idea of where spreads are headed, and it looks like the market might have just a little room to tighten further.

"We believe that the market is growing full on prime U.K. RMBS collateral," said analysts at the Royal Bank of Scotland. "Despite this modest weakness, paper in other classes is generally well-bid, but we do not expect the markets to collapse but rather to stabilize for the time being."

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