
	October 31 , 2005 Welcome to The Pipeline, Andrew Davidson & Co., Inc.'s monthly newsletter. Created as a "pipeline" of relevant and useful information for participants in the fixed income industry, we address recent trends, changes and advances that our consultants, developers and sales force have extensively studied. We value your input and urge you to contact us with questions, comments or article suggestions. Enjoy!



	AD&Co. Update Consulting Corner Model Performance Review Valuation Commentary

AD&Co. Update

New Model Release: MBS Enhanced Prepayment Model: v5.1c

By Rob Landauer

Just in time for the holidays—AD&Co is pleased to announce that v5.1c of our MBS Enhanced Prepayment Model is now available for use as a subroutine and through our website. This version utilizes data through June of 2005 for all fixed rate agency (FNMA, FHLMC and GNMA) loan types including 10, 15, 20 and 30 year fixed and 5 and 7 year balloons. V5.1c replaces v5.1b. Subsequent versions of our v5.1 series will feature refits and recalibrations for our ARM and hybrid models. Read more...

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Consulting Corner

Back in the Forefront
By Andrew Davidson

The mortgage market has been the leader in securitization trends for many years. The mortgage-backed security, the collateralized mortgage obligation and the senior subordinate structure are innovations derived from the mortgage market. The mortgage market has also been the source of numerous other innovations in credit enhancement and structuring. Read more...

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Model Performance Review

Model Performance

By Dan Szakallas

Prepayments displayed noticeable declines from August to September, which was expected, although drops in the discount sector were a bit sharper than anticipated. As rates rose steadily from the lows at the end of June, prepayments on FNMA 30 4.5’s and 5.0’s declined by 24% and 21%, respectively. Read more...

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Valuation Commentary

Valuation Q&As. Part 1: AD&Co Interest Rate Library

By Alex Levin

Two years ago we published Inquiries & Interactions: We're Always Listening, an overview of commonly asked questions about some features of our valuation analytics. Since then, AD&Co’s OAS system has made huge development strides and its customer base has more than doubled, along with the flow of inquiries seeking analytical advice, or integration help. Read more...

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	This email was delivered to laura@ad-co.com. The information contained in The Pipeline is believed to be reliable, but its accuracy and completeness are not guaranteed. All expressions of opinion are subject to change without notice. The Pipeline is provided for informational purposes only and is not a solicitation, endorsement or a recommendation for purchase or sale of any particular security. An affiliate of Andrew Davidson & Co., Inc. engages in trading activities in securities that may be the same or similar to those discussed in this publication.