Mortgage Bonds Slump on ‘Mega-Refi’ Concern: Credit Markets
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Government-backed mortgage bonds are underperforming Treasuries by the most this year, after reaching record high prices, amid concern refinancing will accelerate.
Fannie Mae, Freddie Mac and Ginnie Mae securities have returned 24 basis points, or 0.24 percentage point, less than U.S. debt this month, the worst relative results since December, Barclays Capital indexes show. Fannie Mae’s 6.5 percent bonds fell to 109.06 cents on the dollar as of 11:30 a.m. in New York, declining even as Treasuries gained from the high of 109.94 cents on July 27, according to data compiled by Bloomberg.