Deutsche Bank is collaborating with Bloomberg on a new option adjusted spread (OAS) model for agency mortgage backed securities (MBS) and collateralized mortgage backed securities (CMOs). The OAS model combined with Deutsche Bank's prepayment model seeks to provide market participants with a standard, accurate way to value these securities in the current low interest rate environment.

Available to more than 315,000 Bloomberg Professional service subscribers, the Bloomberg OAS model enables users to generate future interest rate paths using methods that significantly reduce the risk of negative rates. Using advanced mathematical techniques, it allows users to preserve a wide range of possible outcomes while using only 256 interest rate paths, providing real-time results in seconds.

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