The decline in ReRemic issuance and ratings downgrades in the non-agency space means investors have less investment grade assets to buy at a time when many prefer to seek refuge in this safer haven.

According to a report by Bank of American Merrill Lynch, amidst the latest financial crisis investment grade paper has continued to enjoy strong support and liquidity. Many of the outstanding investment grade tranches are either seasoned or backed by stronger prime fixed collateral.

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