It is questionable whether restrictions such as limiting the average lives of a corporate's investment portfolio to two years will allow the corporates to generate enough income to fund their operations never mind offer a competitive return on investments to member credit unions.
the average lives of mortgage-backed securities both fixed and variable will extend.
Finally, the regs put so much emphasis on NEV and average lives but I think they completely miss the true cause of the corporate mess: credit.
Because intangible assets with shorter average lives
have shorter amortization periods--accelerating receipt of tax benefits--the treatment under the old law is more attractive.
In general, higher coupon pass-throughs have shorter average lives than lower coupons.
In declining interest rates, increases in prepayments shorten the expected average lives of these securities.
Also, when assessing the performance of this sector it is crucial to understand that there are different types of mortgage securities with a wide range of coupon rates and expected average lives.
Refinancing dramatically shortened average lives of pass-throughs of all coupons.
A significant portion of the proceeds from the loans sales are expected to be invested in a variety of debt and mortgage-backed securities with shorter average lives
and lower risk-based capital weightings than those of the loans that were sold.
The remaining $102 million in issuance represents fixed- and floating-rate notes with final maturities of five years, one-year interest-only periods and average lives
The stability of these PACs is particularly notable given their long weighted average lives (WAL).
The companion floaters T, V, XA, Y, and YB all have very short average lives, between 2.