Alternative A Mortgage Securities Offer Haven for Prepayment-Weary Investors, Nomura Says
June 6, 2003
For investors looking for an alternative to MBS backed by prime loans, a recent primer suggests that in an environment of falling interest rates, Alternative A MBSs offer prepayment advantages that can translate into substantial value. Analysts at Nomura Securities reported that the key to the prepayment edge in Alt A mortgages is the higher credit risk of Alt A borrowers, which bondholders are