Investors are turning to riskier debt as spreads on commercial mortgage-backed securities narrow sharply, according to Morgan Stanley analysts. The analysts stated in a research report that “collapsing new issue spreads have helped to spur further tightening in legacy securities,” adding that the market is headed for a “strong resurgence” in 2011. The scarcity of new issue, says analyst Richard Parkus, has forced investors to look for additional bonds among legacy securities.

Click here to read the story from Bloomberg.