In a report released March 6, Barclays Capital MBS analysts said that with a great deal of investor attention focused primarily on the largest coupons, relative-value opportunities in the smaller coupons are left unnoticed at times.

Analysts believe this is the case with the FNCL 7% coupon. Although the largest pass-through accounts would probably not get excited about this trade, there appears to be enough of this coupon outstanding to make a reasonably sized trade (at the $100 million level) viable.

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