If a Treasury issue is trading special (100bp repo advantage vs GC in overnight repo), and it's worth -10bp in carry (assuming duration is 10) and the error to the Treasury spline is -5bp, would this mean the issue is cheap given the following :
1) The average error to spline is -2bp over the past 3 months
2) If we adjust the spline error (-5bp) to remove the effects of the repo advantage (-10bp), it would be -5 - (-10) = 5bp cheap to the Treasury spline.
I am expecting convergence from 5bp to -2bp. Am I missing something?