Bloomberg News

Morgan Stanley, Bank of America Said to Market $1.2 Billion CMBS

July 09, 2012

Morgan Stanley (MS:US) and Bank of America Corp. (BAC:US) are marketing about $1.2 billion of bonds tied to commercial property loans, according to people familiar with the offering.

The deal is linked to 72 loans on 98 properties across the U.S., said the person, who asked not to be identified because terms aren’t set. Several classes of the transaction have been placed in advance with investors, the people said. The total mortgage balance is $1.35 billion.

Wall Street banks have arranged about $12 billion of securities tied to skyscrapers, shopping malls and hotels this year, compared with $28 billion in all of 2011, Bloomberg data show. The largest loan in the pool from Morgan Stanley and Bank of America is a $180 million mortgage on an office tower in Baltimore, the people said.

Forecasts for 2012 issuance range from Wells Fargo’s $25 billion to Credit Suisse Group AG’s projection of as much as $45 billion. Sales are down from a record $232 billion in 2007.

Dealers have had to offer more generous terms to buyers on recent offerings. UBS AG and Barclays Plc sold top-ranked securities maturing in 10 years to yield 160 basis points more than the benchmark swap rate on June 28, compared with 115 basis points more than swaps on similar newly issued debt sold in April, Bloomberg data show. Wider spreads can translate to higher borrowing costs for landlords.

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

  • MS
    (Morgan Stanley)
    • $38.51 USD
    • 0.41
    • 1.06%
  • BAC
    (Bank of America Corp)
    • $17.62 USD
    • 0.09
    • 0.51%
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