The Real Deal New York

Banks prepare $4 billion in CMBS

January 05, 2011 09:29AM

Deutsche Bank, UBS and JPMorgan Chase are preparing the year’s first bond sales tied to commercial property loans, sources told Bloomberg News. Deutsche Bank and UBS are partnering to issue as much as $2.5 billion in commercial mortgage-backed securities linked to loans on office buildings, shopping malls and hotels in what would be the largest offering of its kind since the market froze in June 2008. JPMorgan plans to sell $1.5 billion in similar debt. “CMBS new issue still offers attractive returns relative to other fixed-income products,” said Andrew Solomon, a managing director at Angelo Gordon. “Even with new issuance picking up steam, the net supply of CMBS is still shrinking while demand is increasing. I’m pretty sure that means spreads are going to continue tightening.” Both the Deutsche Bank and UBS transaction and the JPMorgan offering are slated for next month. Other banks lining up debt sales linked to commercial real estate include Morgan Stanley, Bank of America, Goldman Sachs, Royal Bank of Scotland and Wells Fargo. [Bloomberg]

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