ABS beckons banks as senior unsecured slumps
Banks struggling for senior unsecured funding should be turning to ABS, investors argued this week. "ABS has never been so far inside senior," said a London-based fund manager. "I’m surprised that banks aren’t printing furiously in short end ABS, trying to grab funding while they can. ABS people have been through a crisis before. They’re not just going to sell out at the first hint of trouble."
While the largest ABS issuers are close to or above their funding targets for this year, market participants expect banks to pre-fund for 2012 if it is available.
However, spreads in all but the most liquid ABS names are unreliable, with liquidity limited and few counterparties willing to trade,
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