While certainly not the first cataclysm for securitization, the sewage leak at National Century Financial Enterprise will, at the very least, pollute the integrity of the entire market, particularly from the outside looking in. At this point, the worst case is becoming increasingly more plausible: that the receivables themselves, to some extent, were fabricated and manipulated.

Though the NCFE blowup will make it more difficult for esoterics and small leveraged companies to come to market, vanilla ABS has arguably not seen meaningful spread widening associated with NCFE, noted Alex Roever, head of ABS research at Banc One Capital Markets. In fact, current conditions are more reflective of events that happened this summer, such as the negative headlines surrounding Capital One Financial Corp. - which announced a memorandum of understanding with the federal regulators - and The Metris Companies, currently under strict direction from the regulators.

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