Asset-backed new issue supply surged to roughly $10 billion last week, pushing the market towards the most voluminous August ever. But the negative sentiment that recently crept into the ABS market persists and investors are now demanding fatter spreads, particularly for issues with the hint of potential headline risk.

The important factor, however, is that transactions are pricing, as the widening seen in ABS pales in comparison to what other markets have experienced. The troubles in other markets have led to more pronounced tiering, spreading even to financially sound issuers, with strong single-A unsecured debt ratings.

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