With spreads for top-tier ABS issuers offering little value, for the first time in a while the Street is noticeably recommending that investors look to headline names for yield and potential spread tightening. In particular, AmeriCredit Corp., The Metris Companies and Capital One Financial have all tightened in the past three months and given the current economic fundamentals, "now is the time to switch the mindset from defensive to aggressive in order to take advantage of opportunity when presented," note researchers at JPMorgan Securities.

Despite a feature story in last Thursday's Wall Street Journal implying that the ABS market has become a haven of volatility driven primarily by the aforementioned names, empirical evidence, Street research and spread tightening suggest the contrary. Capital One's 2003 credit card securitizations, boosted by better-than-expected first-quarter earnings, have tightened significantly since pricing, although spreads are nowhere near levels seen before last year's memorandum of understanding (MOU) with federal regulators.

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