Home equity ABS issuers continued to bombard the market last week - nudging spreads and pushing volume expectations to an amount more than May's $71.8 billion as well as last year's issuance over the same time period. The impressive number, however, was more likely the result of issuers itching to complete deals before quarter-end than a strategic move to sweep under a July 1 deadline before Standard and Poor's applies steepened credit enhancement requirements for most deals.

"Our initial interpretation of S&P's very short and unhelpful description of LEVELS was that it should not have a significant impact on credit enhancement levels required of subprime securities settling in August," said Michael Youngblood, director of ABS research at Friedman Billings Ramsey. "When we had the opportunity to compare LEVELS 5.7 to the prior version, we came to the same conclusion."

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