Oct. 13 (Bloomberg) -- Credit Suisse Group AG plans to shut its unit for originating commercial mortgages to be packaged into bonds after price declines eroded profit margins on new sales, according to two people with knowledge of the matter.
The bank, which hasn’t offered a deal since sales revived in 2009, informed about 50 employees yesterday that their jobs were likely to be eliminated, said the people, who declined to be identified because the matter isn’t public.
Jack Grone, a spokesman in New York for Switzerland’s second-largest bank, declined to comment. The Wall Street Journal reported the planned cuts earlier today on its website.
The extra yield investors demand to hold top-ranked commercial-mortgage bonds rather than Treasuries reached the highest in 20 months last week. Spreads soared to 323 basis points, or 3.23 percentage points, on Oct. 4, the most since February 2010, before narrowing to 317 yesterday, according to Barclays Capital index data.
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