UBS Warburg commented on the significant tightening in auto ABS in this week's Mortgage Strategist, attributing the trend, in part, to the market's over-expectation of supply when the year started. Most of the market was anticipating a spate of issuance from the larger players, such as Ford Motor Credit and GMAC, as conditions in the corporate market early this year looked less than stellar, UBS Warburg said.

Spreads in the corporate market, meanwhile, have come in considerably since the start of the year. "As it turned out, issuance this year so far has come in below expectations, and unsecured auto paper has tightened along with other corporate sectors," UBS researchers note.

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