Continuing bank portfolio liquidations seem to be causing what some MBS analysts are calling a "barbelling" effect in the issuance and selling of Freddie Mac securities, with the selling of bonds that have weighted average maturities (WAM) that are either very old or very new - but very few that have intermediate maturities.

This has especially been true for premium mortgage-backed securities, sources say. For instance, last week the average WAM for 8.5% Freddie bonds was approximately 349 months, and only 6% of the total has WAMs below 300. But nearly 90% of the securities - most of which were issued by ABN Amro - were 352 months or above, so the average was approximately 348 or 349.

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