--Amelia Granger
Markit is rolling out a new MBX agency mortgage bond index that caters to investors looking for exposure to both interest-only swaps and principle-only cash flows. The aim of the synthetic index is to serve as a reference tool that combines data from two earlier indices that captured IOS and PO data separately. Trading will begin Sept. 13.
A Royal Bank of Scotland analyst said the big picture is that investors will now have an index that includes all coupons, making it easier to model the whole mortgage universe. “Currently, an investor has to go to one dealer and work out a swap,” the analyst remarked. “That makes the market not as liquid, because they can’t shop around. This way it’s....