ARM Update

May 22, 2017

Yield spreads for new-issue hybrid ARMs to Treasuries held firm for last week, while fixed-rate MBS experienced a modest tightening in response to the broader bond market rally and flattening yield curve. We continue to see strong demand for new issue 7/1s and 10/1s. These structures compare favorably to 15-year fixed-rate MBS on an OAS basis and have less duration. Finally, the pace of seasoned selling has remained subdued compared to the heavy selling of March.

Metrics for some commonly traded structures are below:

Michael S. Erhardt, CPA

Senior Vice President

Investment Strategist

Vining Sparks, IBG

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