Given the strong rally in legacy CMBS, many investors are questioning how much and if there is any room for further spread tightening in the sector, FTN Financial analysts said in a report released yesterday.

They said that one tool for measuring the “cheapness” of legacy CMBS is the firm's daily CMBS regression. Their analysis showed that, on average, the 2006-2007 vintage A4s are now near fair value.

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