Deutsche Bank delays GIC-sponsored CMBS deal tied to its NY headquarters
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A NEARLY US$1.5 billion single-loan commercial mortgage bond linked to Deutsche Bank's new headquarters in Manhattan's Columbus Circle was postponed last week amid market weakness, according to Wall Street research reports and bond investors.
GIC, Singapore's sovereign wealth fund, and the Abu Dhabi Investment Authority were the sponsors on the single-asset, single-borrower (SASB) commercial mortgage bond, driving the securitisation financing, according to John Kerschner, the head of US securitised products investing at Janus Henderson.
It's the latest transaction to be delayed in US capital markets where borrowing has grown increasingly unpredictable as Russia's invasion of Ukraine results in bond yields moving wildly.
On Monday (Feb 28), about 10 companies postponed investment-grade bond sales, according to underwriter. It's a sharp change in markets that for much of the last 2 years would hand out credit to just about anyone.
Research reports from both Stone Harbor Investment Partners and JPMorgan Chase & Co noted the single-loan commercial mortgage bond was no longer in the market.
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"There were also whispers of other CMBS deals being put on pause as well as in other securitised markets including credit risk transfer and asset-backed securities," said JPMorgan analysts led by John Sim.
People close to the Deutsche Bank building deal said the transaction was postponed but will be completed when conditions are better. A representative for Deutsche Bank declined to comment.
Last Thursday Fannie Mae delayed a sale of bonds backed by prime mortgages, and risk premiums of asset-backed security offerings have widened after Russia's invasion of Ukraine.
Spreads for securitised debt have been widening all year, and the process of selling the bonds has slowed, as investors have grown concerned about Federal Reserve rate hikes and inflation hurting consumers.
Deutsche Bank moved its New York headquarters uptown from the Wall Street area last year to a tower in Columbus Circle within the complex formerly known as the Time Warner Center. It was renamed Deutsche Bank Center in May. BLOOMBERG
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