JPMorgan has noted that generic (non-Moody’s) BBBs were priced at unusually wide concession to JPMorgan’s index of 20 REIT bonds. Since last December, analysts have viewed the cheapness of BBB CMBS to REIT paper as a "confirming signal" for down-in-quality trades and more recently as a profitable cross sector trade idea inits own right. The latest BBB spread tightening coupled with wider REIT spreadssuggests that many long BBB/short REIT bond positions have earned 10bps on each "leg" (for a total of 20bps) since May 16.

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