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Credit suisse cmo price

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May 7, 2008 4:07 pm

I have a CREDIT SUISSE FIRST BOSTON MTG SECS CORP2006-1 MTG PASSTHRU CTF CL 3-A-9 5.750% 02/25/36 B/EDTD 01/01/06 CLB cusip 2254070UZ4 CMO in a client’s account.  On the March statement it was priced at 101. and on the April statement it went down to 74.0. Does anyone know why the large drop in price?

May 7, 2008 8:00 pm

May 8, 2008 2:41 am

Might have something to do with that whole subprime thing you’ve been reading about in the newspapers…

  That's pretty funny Joe.  Maybe he hasn't been reading the papers though...
May 8, 2008 2:59 am

I think the main reason is more people selling than buying.

May 8, 2008 4:04 am

May 8, 2008 4:16 am

Supply-demand economic concepts have been around for at least 6 months now.  When will these concepts get their proper due?

May 10, 2008 10:30 pm

I have the same issue with a JP Morgan AAA CMO. I’ve been expecting some pressure on it over the last year but it has been holding up in the high nineties. Now just in the last month I see it at 67. I’m suspecting that it wasn’t fully marked to the market in the nineties and I’m going to check with my bond desk to see what a true bid ask is currently.

May 10, 2008 10:38 pm

I can’t comment on the specific bonds you have listed but I have seen this happen.  In the cases I am aware of, there was no bid on these bonds for quite a while, so the B/D just listed the last available trade price.  Now some of these bonds are starting to be picked up at pennies on the dollar, therefore giving a more recent price, therefore the large drop.

Jul 23, 2008 8:47 pm

from BOBD: I also have some of the same credit suisse.  Any replys as to devaluation?

Jul 23, 2008 8:59 pm

[quote=Primo]I think the main reason is more people selling than buying.[/quote]

There ya go with that crazy voo-doo talk again…