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Goldman Among Banks Preparing $3.7 Billion of Mortgage-Backed Securities
Wall Street banks are marketing about $3.7 billion of bonds tied to property loans, wagering investor demand for the debt will withstand mounting concerns that the U.S. economic recovery is stalling and the European crisis is spreading.
Goldman Sachs Group Inc. (GS) and Citigroup Inc. (C) are offering $1.5 billion in bonds, while Wells Fargo & Co. and Royal Bank of Scotland Group Plc (RBS) are selling $1.48 billion of securities, according to people with knowledge of the sales. Deutsche Bank AG (DBK) is marketing $685 million of notes tied to hotel mortgages.
Banks are preparing as much as $10 billion in new sales of commercial-mortgage bonds in the third quarter, according to a July 8 report from JPMorgan Chase & Co. Even as the pipeline has grown in the $700 billion market for debt tied to hotels, offices and shopping centers, the U.S. unemployment rate has increased to the highest level this year and credit markets have been roiled by speculation that Europe’s debt crisis may engulf Italy.
Top-rated securities linked to commercial real estate yield 209 basis points more than Treasuries as of July 8, according to a Barclays Plc index. The spread has narrowed from 227 basis points on June 24 after the Federal Reserve Bank of New York halted its sales of mortgage bonds acquired in the rescue of American International Group Inc., which had curbed demand for debt ranging from high-yield bonds to securities linked to property. A basis point is 0.01 percentage point.
The mortgage-bond deal from Goldman Sachs and Citigroup is linked to 71 loans on 131 properties in states led by Texas, Arizona and California, said a person, who declined to be identified because terms aren’t public. The transaction from Wells Fargo and RBS is linked to 76 loans on 132 properties in states led by California, Wisconsin and New York. Both securities may be sold as soon as next week.
http://www.bloomberg.com/news/2011-0...age-bonds.html
Wall Street banks are marketing about $3.7 billion of bonds tied to property loans, wagering investor demand for the debt will withstand mounting concerns that the U.S. economic recovery is stalling and the European crisis is spreading.
Goldman Sachs Group Inc. (GS) and Citigroup Inc. (C) are offering $1.5 billion in bonds, while Wells Fargo & Co. and Royal Bank of Scotland Group Plc (RBS) are selling $1.48 billion of securities, according to people with knowledge of the sales. Deutsche Bank AG (DBK) is marketing $685 million of notes tied to hotel mortgages.
Banks are preparing as much as $10 billion in new sales of commercial-mortgage bonds in the third quarter, according to a July 8 report from JPMorgan Chase & Co. Even as the pipeline has grown in the $700 billion market for debt tied to hotels, offices and shopping centers, the U.S. unemployment rate has increased to the highest level this year and credit markets have been roiled by speculation that Europe’s debt crisis may engulf Italy.
Top-rated securities linked to commercial real estate yield 209 basis points more than Treasuries as of July 8, according to a Barclays Plc index. The spread has narrowed from 227 basis points on June 24 after the Federal Reserve Bank of New York halted its sales of mortgage bonds acquired in the rescue of American International Group Inc., which had curbed demand for debt ranging from high-yield bonds to securities linked to property. A basis point is 0.01 percentage point.
The mortgage-bond deal from Goldman Sachs and Citigroup is linked to 71 loans on 131 properties in states led by Texas, Arizona and California, said a person, who declined to be identified because terms aren’t public. The transaction from Wells Fargo and RBS is linked to 76 loans on 132 properties in states led by California, Wisconsin and New York. Both securities may be sold as soon as next week.
http://www.bloomberg.com/news/2011-0...age-bonds.html