PT  - JOURNAL ARTICLE
AU  - Eknath Belbase
TI  - STACR and CAS: <em>What They Tell Us</em>
AID  - 10.3905/jsf.2014.19.4.045
DP  - 2014 Jan 31
TA  - The Journal of Structured Finance
PG  - 45--51
VI  - 19
IP  - 4
4099  - https://pm-research.com/content/19/4/45.short
4100  - https://pm-research.com/content/19/4/45.full
AB  - In this article, we look at what the execution of Freddie Mac’s Structured Agency Credit Risk (STACR) and Fannie Mae’s Connecticut Avenue Securities (CAS) tell us about guarantee-fee pricing in a capital-markets driven world. We then contrast the subordination requirements being discussed in Washington (such as in Corker-Warner) with the actual amounts of subordination behind Fannie Mae’s and Freddie Mac’s transactions and discuss where the appropriate middle ground may lie. Finally, we discuss remaining policy changes required to invite greater investor participation and hence lower credit guarantee costs.TOPICS: Credit risk management, fixed income and structured finance