Securitization Weekly Overview: Strong Technicals, Selective Risk

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Securitization Weekly Overview: Strong Technicals, Selective Risk

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Securitization Weekly Overview

Strong Technicals, Selective Risk

Spreads tight: carry, structure, selection dominant 10 July 2026

Securitized products remain among the most attractive sectors in fixed income, Securitized Products Strategy

supported by resilient fundamentals, strong demand, and moderating issuance. However, United States

with spreads already tight across many sectors and volatility continuing to retreat, the Chris Flanagan

next leg of performance is likely to come less from broad spread compression and more FI/MBS/CLO Strategist

from carry, structure, and security selection. Dispersion is increasing across CLOs, BofAS+1 646 855 6119

CMBS, RMBS, and ABS, reinforcing a preference for higher-quality exposures, strong christopher.flanagan@bofa.com

structural protections, and favorable convexity characteristics. We continue to favor AAA Alvin Fung

corporate CLOs, agency and non-agency CMO floaters, and senior CRE exposures (SASB ABSBofASStrategist

floaters, CRE CLO, data center securitizations) where carry remains attractive relative to +1 646 855-9091

alvin.fung@bofa.com

risk. We remain underweight duration exposure.

Better technicals in H2, but a thinner margin for error

The technical backdrop remains constructive. Securitized products issuance has

remained strong in 2026, but forward calendars imply a slower second-half pace, while

demand continues to absorb supply with little evidence of spread fatigue. HY CDX and

For a list of common acronyms, pleaseMOVE have both retraced significantly from earlier war-related highs, supporting tighter

refer to the appendix at the conclusioncredit spreads more broadly and improved financing conditions. At the same time,