RBS Bringing New CMBS to Market, First for 2010
The Royal Bank of Scotland Group (RBS) is coming to market with a $309.7m commercial mortgage-backed security (CMBS) deal being offered to private investors, sources at the bank confirm to HousingWire. If the information holds true, it would be the first such deal of 2010. CRE Finance president Patrick Sargent said he believes deals of this kind may be a harbinger for good things to come, adding that the lower-risk nature of new-issue CMBS deals is increasing investor comfort. “There’s a lot of money out there waiting,” he told Globe St.com. The deal is collateralized mainly by retail business tenancies in New York, the RBS source said, adding that no information is publicly available at this time. The new issue is a clear positive in a market that continues to see delinquencies spike and, as for CMBS, the growing refinancing stress in the market may lead to the closure of some mid-sized banks. In a speech yesterday at the Western Independent Bankers Conference in Scottsdale, Federal Reserve governor Elizabeth Duke acknowledged the challenges facing the banks that are trying to service these loans. "The ongoing deterioration in commercial real estate loans is perhaps of greatest concern for community bankers," she said. "These loans make up more than 30 percent of community bank assets and have deteriorated sharply as fundamentals in property markets have weakened." The Federal Reserve Bank of New York also recently closed the Term Asset-Backed Securities Loan Facility this week, which settled $857m in CMBS. Write to Jacob Gaffney. The author holds no relevant investments.