SOURCE: Securian Financial Group, Inc.

November 13, 2008 17:10 ET

Advantus Sees Silver Linings in Stormy Mortgage Securities Market

ST. PAUL, MN--(Marketwire - November 13, 2008) - While the devastated residential mortgage market continues to make headlines, experts in structured finance at Advantus Capital Management are finding opportunities in high yielding investment-grade mortgage bonds.

In a paper co-authored by Advantus executives Dean Di Bias, Sean O'Connell, and Chris Sebald, they explain how "guilt by association" has caused the market to devalue mortgage-backed securities that exhibit excellent fundamentals and credit metrics, yet trade at yields higher than B-rated corporate bonds.

"Securities such as these yield between 10 and 15 percent, representing extremely attractive and, we believe, safe investments," the authors say. They go on to point out that they believe that these investment opportunities are very likely to be available for some time to come as the financial system "moves through its massive restructuring cycle" and adjusts to much lower leverage.

Di Bias, O'Connell and Sebald expect the housing market to remain soft for many years to come. Historically, it has taken the US market between five and seven years for housing to reach new highs after a real estate downturn begins. Additionally, they expect that more financial institutions will fail, creating additional opportunities in the high-yield mortgage securities market.

The Advantus white paper, "How market inefficiencies are creating high-yielding mortgage opportunities," is available at

Advantus Capital Management manages fixed income and real estate investment products and services for institutional and retail investors, including sub-advised mutual funds, 401(k) offerings and variable insurance and annuity portfolios. Advantus has nearly $19 billion under management. Its parent company is Securian Financial Group, Inc., which has nearly $700 billion of life insurance in force, $30 billion in assets under management as of September 30, 2008, and a work force of 3,400 employees nationwide. Securian serves more than 9,000,000 individuals in the U.S.

NOTE: to receive hi-resolution photos of Dean Di Bias, Sean O'Connell, and Chris Sebald via email, contact


Contact Information

  • Contact:
    Maggie Jensen, APR