Floating-rate triple-A CMBSs are now cheap relative to credit cards, but a heavy 1Q pipeline will likely stop them from tightening until May. In fixed-rate triple-A CMBS, leaves recommendation at neutral as triple-A spreads remain fair. In mezzanine investment-grade classes, double-As and single-As now appear historically rich. But triple-Bs have sold off and triple-Bs are 5bp cheap. Support and WAC IOs are cheap to fair value. Recommends IOs for the carry. At recent levels, PAC-like IOs appear fair to five-year triple-A CMBSs, but should tighten as the market starts comparing the sector to similar duration debt. Seasoned premium-dollar CMBSs are now cheap.
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Spreads ranging from 16-18 basis points over the three-month, interpolated yield curve on the P1 (Moody's) and F1+ (Fitch) notes, to 160 to 170 over the benchmark on the class D notes.
April 25 -
Mortgage rates rose 7 basis points this week, Freddie Mac said, and more increases are likely following a weaker than expected gross domestic product report.
April 25 -
Broken down by product type, the agency's NJCLASS Standard Fixed product should account for a large majority of the loans, 75.4%. NJCLASS Consolidation will account for the next-largest group, 14.1%.
April 24 -
Congressional Review Act resolutions are ramping up ahead of the 2024 election cycle. Experts say that, although none are likely to become law, the resolutions are still powerful messaging and political tools.
April 24 -
The notes will price against Treasurys, with spreads expected to fall between 85 and 90 basis points over the benchmark.
April 24 -
The JPMorgan Chase CEO took aim Tuesday at the proposed Basel III endgame rules, hindrances to mergers and bureaucratic burdens. "I would love to have a more productive relationship with regulators, but I think it takes conversation," Dimon said.
April 24