Wrapped volume reached $16,406 billion in the 1Q06, which is a significant drop from last quarter's showing of $23.4 billion, although faring a tad better than 1Q05's figure of $13 billion. Many attribute the drop to the tight spread environment, where only mortgage wrapped transactions, and some auto deals, flourished.

Mark Zucker, MBIA's head of global structured finance, said that challenges that the monoline market faced include heavy credit and pricing challenges in the first quarter, and that such issues are expected to continue going forward. Zucker stated the market's current stance in the credit cycle, tight spreads and pricing for monolines that he considers almost predatory are marginalizing players in the business.

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