Two ABS tranches made up of car loans are available for purchase in the secondary market. Discuss which of the two tranches provides a more attractive investment opportunity. Refer to each metric:

ABS Power Series #1 ABS Force Series #1

Credit Rating 'BBB' 'BBB+'

Trading Margin 0.75% 0.93%

CPR 21% 23%

Interest only loans 45% 35%

Ballooning provisions?* YES NO

Arrears (90 days) 1.20% 0.80%

Seasoning 1.2 Years 4.5 Years

Clean up call? NO YES