Wall Street’s on-again, off-again love affair with commercial-mortgage-backed securities is on the rocks as markets get whipsawed by Europe’s debt crisis.
Goldman Sachs Group Inc. (GS), Deutsche Bank AG (DBK) and other banks sold $2.4 billion of new deals this month with the widest spreads this year. An index tied to lower-rated bonds issued before the financial crisis fell 7.4 percent to 56 cents on the dollar, approaching the lowest level in almost six months.
Market volatility, which rose the most last week since January, makes it harder to gauge investor demand for bonds tied to everything from shopping malls to mobile home parks. Lenders hold commercial mortgages for several months before selling them as securities, which means swings in values as they accumulate debt can eat into profits and thwart efforts to boost sales.
Read more...Wall Street CMBS Allure Fades as Volatility Surges: Mortgages - Bloomberg
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.