CMBS bond yields low, Barclays finds

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Yields on commercial mortgage-backed securities bonds, or CMBS, were low compared to benchmarks set by U.S. programs aimed to help drive demands, according to data from Barclays Capital. While the demand for bonds slightly increased due to rising stocks and government programs, late payments and a rise in delinquencies on commercial mortgages created a “counterpoint to the rally,” according to Barclays analyst Aaron Bryson. While the impact of TALF is “starting to fade,” according to Bank of America analysts, the fourth round of the federal Term Asset-Backed Securities Loan Facility, or TALF, financing is scheduled to begin Oct. 21. Currently, U.S. commercial real estate prices are down 40.6 percent from their peak in October 2007, according to Moody’s Investors Service.

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