Not surprisingly, given the sheer volume of the sector, real estate ABS remained the dominant area of business for the guarantor industry in 2Q05 reaching nearly $20 billion of wrapped exposure. "Mortgage-related assets are the biggest asset class out there," said Tom Adams, senior managing director at FGIC. Behind real estate was the subprime auto sector at $4.8 billion, with shipping container leases and 12b-1 fees bringing up the rear at $413 million and $580 million, respectively.

The leading guarantor in the quarter was Fannie Mae, returning to the financial guaranty market after a yearlong hiatus, during which the GSE did not wrap a single offering. Fannie Mae wrapped two transactions in the quarter, totaling $4.4 billion to edge out FGIC. With Fannie Mae's recent re-entery to the guaranty market, other guarantors do not feel any competitive pressures from the GSE, according to spokespeople from both FGIC and MBIA.

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