U.S. asset-backed spread quotes -- February 3

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U.S. asset-backed spread quotes -- February 3

    NEW YORK, Feb 3 (Reuters) - Following are asset-backed 
securities offered spreads quoted for Thursday, Feb. 3:

Avg. Life Benchmark Spread
MBNA 99-IA 2.9 6-1/4 8/02 +71
Chase 99-3A 4.9 5-yr T +81
First USA 97-3A 2.7 1-Month Libor +17
AMEX 99-5A 4.9 1-Month Libor +19

Premier 99-3 A2 0.77 EDSF +17
Ford 99D-A4 1.8 5-1/2 7/01 +68
BMW 99A-A4 2.9 5-7/8 9/02 +71

Bombardier 99B-A1B 0.9 EDSF +36
Vanderbilt 99C-IA2 3.0 6-1/4 8/02 +96
GreenTree 99-5A4 5.0 7-1/4 8/04 +116

Saxon 99-3 AF2 2.0 6-3/8 9/01 +98
Chase 99-3 IA3 3.0 5-7/8 9/02 +106
GE 99-3 5.2 7-7/8 8/04 +121
RFC 99KS2 A8 7.6 6-1/8 8/07 +163

Floating Rate
Chase 99-3 II A-1 2.1 1-month Libor +33

SLMA 97-3 A1 2.5 3-month T bills +90
SLMA 97-3 A2 7.2 3-month T bills +102

Note: EDSF - Eurodollar Strip Forwards. Treasury benchmarks
are referred to by coupon and maturity.
* Quotes provided by Prudential Securities.
* Prudential Securities shall not be liable for any errors
or delays in the content, or for any actions taken in reliance
* Asset-backed securities are bonds backed by a payment
stream from an underlying pool of customer loans. If sold prior
to maturity, the price an investor receives may be less than
the original purchase price. The bonds pay interest either
monthly or semi-annually until maturity when the principal is
paid back in full.
The yield, average life and the expected maturity are based
on prepayment assumptions that may or may not be met. Changes
in prepayments may significantly affect yield, average life and
expected maturity. Generally, when interest rates decline,
prepayments accelerate beyond the initial pricing assumptions,
which could cause the average life and expected maturity of the
securities to shorten. Conversely, when interest rates rise,
prepayments slow down beyond the initial pricing assumptions,
and could cause the average life and expected maturity of the
securities to extend, and the market value to decline. When
prepayments accelerate due to falling interest rates, principal
may have to be invested at a lower interest rate than the
coupon of the security. Asset-backed securities are subject to
price change and availability.

) copyright 2000 Reuters, Ltd.

Can anyone explain the significance of the spreads that we see in this table?

-- Possible Impact (posim@hotmail.com), February 03, 2000


From threa on Inverted Yield Curve Below: LINK

Spreads are a good indicator of the appetite among investors to hold so-called ``spread'' products in their portfolios. Spread products include mortgage-backed securities, asset-backed securities and corporate bonds. Higher spreads indicate a preference for government paper.

-- Bill P (porterwn@one.net), February 03, 2000.

An earlier thread: Link

-- Possible Impact (posim@hotmail.com), February 03, 2000.

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