Pre-Thanksgiving supply flooded the asset-backed primary market, pricing over $13 billion across all sectors, including a sea container deal and the second wholesale dealer floorplan ABS seen this year. Home equity supply continued to dominate the landscape, but is becoming a tougher sell, evidenced by the cheapening of sub bonds in recent weeks.

The rush of home equity supply has been unrelenting of late, and as a result spreads have widened significantly. While wrapped senior paper is now clearing in the 40 basis point area over one-month Libor, triple-B subs have continued widening, and are approaching the 400 basis point threshold over one-month Libor.

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