FICC Focus Credit Crunch: Beach Point’s Hunsaker on Structured Landscape
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Jan 30, 2026 Benjamin Hunsaker, Portfolio Manager and Head of Structured Credit at Beach Point Capital, discusses mortgage and structured credit markets and long-short risk management. He covers agency MBS dynamics, non-QM mortgages, prepayment and coupon risks. He also walks through CMBS dislocations, consumer policy risks like proposed APR caps, and niche opportunities in distressed CRE and ABS.
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Horizontal Relative-Value Advantage
- Long-short structured credit can harvest alpha by shifting horizontally across correlated instruments rather than vertically within a single wrapper.
- Benjamin Hunsaker argues this cross-asset approach regains lost shorting/relative-value skills and can exploit borrowable high-yield bonds and ETFs.
FHFA MBS Purchases Are A Market Game-Changer
- FHFA buying agency MBS is a material macro shock with uncertain mechanics and market effects.
- Hunsaker warns this buyer changes relative attractiveness across agency and non-agency mortgage sectors and complicates duration/hedging assumptions.
Agency OAS Loses Power After Prepayment Costing
- Agency current-coupon OAS is tiny once you strip embedded prepayment option costs.
- Hunsaker notes levering an asset with ~8bps OAS is unattractive if financing costs exceed that spread.