
	April 28, 2006 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 Model Performance Review Valuation Commentary

AD&Co. Update

The Big Event Approaches

By Rob Landauer

The 2006 version of AD&Co.'s annual conference, “Understanding Borrowers Actions: A Look at Prepayments, Defaults & Security Valuation,” is just around the corner. The event will be held this year on June 15th at the world famous Puck Building in New York City and on June 20th at the ultra hip W hotel in San Francisco. Registration is free for our clients and friends and is currently available by clicking on the link on the home page of our website at www.ad-co.com. Links to the conference agenda, venue directions and hotel recommendations can also be found on the registration page.

As the name implies, this year’s conference will focus on new developments in our prepayment models, unique applications of our valuation (OAS) models and an in-depth discussion of the research and findings surrounding our default and credit modeling efforts Read more...

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Model Performance Review

Model Performance
By Dan Szakallas

Prepayments rose noticeably in March, as seasonal home sales and increased business days drove prepayments higher across the board. Given the 4 additional business days in March compared to February and the yearly trend of home sales increasing in March, prepayments on FNMA 30-year discounts rose over 30% and even seasoned premiums rose over 10%. Interestingly, Read more...

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Valuation Commentary

Modeling Home Prices as Dynamic Assets

By Alex Levin

The credit/default modeling efforts are receiving considerable attention these days and they will be a prime focus during the afternoon session at AD&Co.’s upcoming 2006 Annual Conference. This report summarizes some of our current views on this topic.

One factor that drives a borrower’s decision to default is the home price of his/her property. The owner with grim personal financial circumstances has an option to sell the property or to let the bank take it and foreclose. This decision will be based, primarily, on the amount of outstanding debt and the value of the house. 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.