Bloomberg News

Deutsche Bank Said to Market $941.3 Million CMBS Debt Offering

February 27, 2012

Deutsche Bank AG (DBK) is marketing $941.3 million of bonds tied to commercial mortgages in the second sale of the debt in 2012.

The pool comprises 43 loans on 67 properties across the U.S., according to a person familiar with the offering, who declined to be identified because terms aren’t set. Retail buildings account for 52.8 percent of the transaction, while offices make up 15.2 percent and multifamily dwellings 11.6 percent, said the person.

Wall Street is planning sales tied to mortgages on everything from strip malls to mobile home parks with relative yields on the securities at the narrowest since June. Investors are demanding 207 basis points, or 2.07 percentage points, more than U.S. Treasuries to hold the debt, according to the Barclays Capital CMBS AAA Super Duper Index. That’s down from a 20-month high of 323 basis points Oct. 4 as the European debt crisis roiled markets.

Issuance is accelerating after drying up amid the turmoil. Morgan Stanley has a $1 billion deal slated for next month, a person familiar with that deal said. Sales fell to $2.87 billion in the fourth quarter last year, from $8.26 billion in the previous three months, according to data compiled by Bloomberg.

Goldman Sachs Group Inc. and Citigroup Inc. sold $1 billion of the securities in January. Wall Street banks arranged about $28 billion of debt backed by property loans last year, compared with $11.5 billion in 2010, Bloomberg data show. Issuance peaked at $232.5 billion in 2007, helping fuel a boom in property values, the data show.

The spread on commercial-mortgage bonds determines how attractive Wall Street rates are for borrowers and drives the velocity of new offerings. Strong investor demand encourages new lending, reducing borrowing costs for landlords. Bank forecasts for commercial-mortgage bond sales in 2012 range from Wells Fargo & Co.’s prediction of $25 billion to UBS AG’s and Credit Suisse Group AG’s estimates of as much as $45 billion.

To contact the reporter on this story: Sarah Mulholland in New York at

To contact the editor responsible for this story: Alan Goldstein at

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