Horizontal v Vertical or an L-Strip?

The majority of the Investment Banks have already positioned themselves to be within Basel III compliance despite having almost three months until the regulations go into effect.  Risk retention impedance aside, the CMBS market has recovered from the Summer instability, is active and posting bankable applications.  Spreads are once again priced over SWAPs, currently trading 17 basis points below corresponding Treasuries.  At least four US Banks are holding their retention rather than laying the risk off to the B Piece Buyer, thus minimizing cost and delivering a higher expectation of close as applied for.