Bloomberg News

Cantor Fitzgerald Adds Credit Suisse Debt to Increase CMBS Deal

November 30, 2011

Nov. 29 (Bloomberg) -- Cantor Fitzgerald LP plans to sell $775 million of commercial-mortgage bonds including loans made by a defunct unit of Credit Suisse Group AG, using a shakeout in the market to bolster its deal.

The largest loan in the pool, $99.3 million in debt tied to a mall in Grandville, Michigan, was originated by Credit Suisse affiliate Column Financial Inc. on June 1, according to a filing with the Securities and Exchange Commission. Cantor acquired the loan on Oct. 28, according to the filing.

Lenders have struggled to amass enough loans to package into securities. A slowdown in the U.S. economic recovery and Europe’s sovereign debt crisis has roiled credit markets in the past four months, making it harder for banks to gauge how much cash they will get from future bond sales. Credit Suisse shut the group dedicated to originating commercial mortgages for bond sales last month before being able to complete a deal since entering the market in February.

About 15 percent of Cantor’s deal consists of loans the New York-based broker dealer purchased from Credit Suisse, according to the filing. Steven Vames, a Credit Suisse spokesman in New York, declined to comment. Sandra Lee of Cantor Fitzgerald also declined to comment.

Anthony Orso and Michael Lehrman, who run Cantor’s commercial mortgage bond business, were previously co-heads of the CMBS group at Credit Suisse.

Wall Street banks have arranged about $26 billion of commercial-mortgage backed securities this year. While that’s up from $11.5 billion in 2010, issuance totaled more than $200 billion in 2007 when commercial-real estate prices peaked, according to data compiled by Bloomberg.

The extra yield investors demand to hold top-ranked commercial-mortgage bonds rather than Treasuries has risen 19 basis points to 286 basis points since the end of October, according to the Barclays Capital CMBS AAA Super Duper Index. While spreads have declined from 323 on Oct. 18, they’re up from 226 at the end of July.

--Editors: John Parry, Mitchell Martin

To contact the reporter on this story: Sarah Mulholland in New York at smulholland3@bloomberg.net

To contact the editor responsible for this story: Alan Goldstein at agoldstein5@bloomberg.net


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