Liquid real estate Issue 05
First US CMBS deal just gets away
It took six weeks but 2008 finally got its first CMBS deal in mid-February, from Morgan Stanley and Bear Stearns, who sold a $1.2 billion transaction.
The deal did not come easily. The banks had to discount the AAA-rated tranche by 235 basis points over the 10-year swap rate, the widest margin ever. Guidance had been 200bp. By comparison, the same sort of deal 12 months ago would have yielded 30bp.
But bankers crossed their fingers that this pioneering effort will lead the way for other deals in a badly struggling market. Blackstone Group has been expected for some time to bring the largest ever CMBS, possibly as much as $11 billion, backed by its...
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