Despite the weakened credit environment brought about in part by the deterioration of the US sub-prime market, primary supply in the European ABS market has continued unabated. However, the sub-prime contagion into other sectors, combined with nervousness brought about by recent LBO headlines, is responsible for a drop in liquidity, and subsequently in demand, for structured product.
Consequently, the process of syndication is changing. “In a seller’s market, it is much easier to build a book,” says Chris Pink, head of structured products distribution at Wachovia.
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