PHOENIX - With ABS spreads grinding ever tighter and investors showing no signs of getting up from the table, one trader gave his opinion of where investors can satisfy their cravings during a preconference workshop at Information Management Network ABS West 2005 conference held here last week.

Using U.S. Treasurys as a benchmark, spread levels in the credit card and auto sectors are currently just five to 10 basis points away from those witnessed in 1998, said George Smith, ABS trader at HSBC Securities. In this yield-starved environment, investors can't afford to be too finicky. "Any spread widening should be viewed as a buy opportunity," Smith said. "As a defensive position, stay with liquid and double-A [rated] products."

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