Barclays Says It’s Time To Seek Safer CMBS: Structured Weekly

With the US labor market getting weaker, investors should sell older and riskier commercial mortgage bonds and instead buy safer securities, including floating-rate single-borrower commercial mortgage-backeds, strategists at Barclays wrote in a note at the end of last week.

Those types of bonds should help to shelter investors from the risk of downgrades and losses if the sharp economic downturn implied by the rates market materializes, write strategists Lea Overby and Anuj Jain in an Aug 2 note.

“The recent rates rally has made it more palatable for investors to sell more seasoned conduit CMBS, especially now that the probability ...