• SEPT FNCL 4.0: +10 at 101-11 (101.344) SEPT FNCL 4.5: +06 at 103-17 (103.531)
  • Secondary Market Current Coupon: -4.1bps at 3.776%
  • CC Yield Spreads:+78.2bps/10yTSY. +75.9bps/10yIRS. SPREADS CLOSED WIDER BUT OFF WIDES OF SESSION
  • UST10YR:-5.6bps at 2.994%. 2s/10s: 6bps FLATTER at 238bps. 2YR NOTE= WORST PERFORMER
  • S&P CLOSE: +0.12% at 1096.45 (not futures, the actual index) HIGH: 1098.47 LOW: 1080.58  WORST SECTOR: Financials -0.10%

Rate sheet influential MBS got their keister kicked by Treasuries today but price levels rose enough to give  lenders a chance to reprice for the better. After new rate sheets were released...loan pricing was as aggressive as it's ever been...

Below is a day over day comparison of loan pricing, after reprices, as well as a week over week comparison. On average, rebate improved 32.1bps today, but the average was thrown out of whack by the lender who reported earnings today.  The biggest pricing improvements were seen in the note rates closest to par.

The most expensive permanent buydowns are from 4.875 to 4.75 (securitize in 4.0 vs. 4.5) and 4.375 to 4.25 (securitize in 3.5 vs. 4.0). I didn't show you the  actual buydown cost but I can tell you they range from 50 and 80bps. Best execution for well-qualified borrowers is 4.50%.

The last metric I want to point out is the "Δ BE v M" column. This is the day over day change in the spread between Mandatory and Best Efforts pricing.  On average it tightened 5.3bps today. This means lenders have less juice in their rate sheets because they are on the hunt for loan production.

Red Buydown Δ = cheaper buydown. Black Pricing Δ = improved rebate. Red ΔBE v M = less margin in rate sheet.

Not including independent shops like Provident, I see two of the majors  buying the market right now. Anyone want to take a guess on who they are ?

The loan pricing war continues....

WHAT'S ON THE SCHEDULE TOMORROW?

CPI, Consumer Sentiment, TIC Flows, and earnings from Citi and BoA. Also, GNs roll tomorrow but your pricing already reflects the September coupon so no worries.