Wider Libor-OIS spreads can offer cheaper MBS funding opportunities
UBS report reveals investors could be able to access attractive mortgage-backed securities funding
Widening Libor-OIS spreads have created a window of opportunity for investors to access cheap funding rates in the mortgage-backed securities (MBS) market, according to a report issued by UBS last month.
The Libor-OIS spread tracks changes between the London interbank lending rate relative to the overnight index swap rate referenced to the US Federal funds lending rate.
The spread has become the de facto barometer for the current credit crisis, says UBS, reflecting the evolution of both liquidity
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