Bloomberg News

Goldman, Citigroup, Jefferies Said to Plan CMBS Transaction

May 10, 2012

Goldman Sachs Group Inc. (GS:US), Citigroup Inc. (C:US) and Jefferies Group Inc. (JEF:US) plan to sell $1.5 billion of commercial mortgage-backed securities as soon as next week, according to people familiar with the transaction.

The deal contains 79 loans tied to 175 properties across the U.S., said the people, who asked not to be identified because terms aren’t public.

Wall Street has arranged about $5 billion of the debt this year, according to data compiled by Bloomberg. Sales are picking up after slowing in the fourth quarter as market volatility crimped new lending.

Bank projections for commercial-mortgage bond deals in 2012 range from Wells Fargo & Co.’s $25 billion to Credit Suisse Group AG’s projection of as much as $45 billion.

Commercial-mortgage bond values slid last month when the Federal Reserve Bank of New York said it was considering selling assets from its Maiden Lane III portfolio on concern there wouldn’t be enough buyers. The district bank sold $7.5 billion of collateralized debt obligations tied to commercial real estate to Barclays Plc and Deutsche Bank AG on April 26 after a bidding war erupted for the securities. UBS AG yesterday sold $1.5 billion of similar securities.

Prices on a commonly cited measure of demand for lower- rated commercial-mortgage bonds fell to 59.8 cents on the dollar on April 10, according to data from Markit Group Ltd. Prices have since rebounded to 61.9 cents, still down from the 2012 high of 72 cents in January.

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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Companies Mentioned

  • GS
    (Goldman Sachs Group Inc/The)
    • $189.59 USD
    • -0.16
    • -0.08%
  • C
    (Citigroup Inc)
    • $53.66 USD
    • 0.14
    • 0.26%
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