US commercial mortgages worry Fed amid defaults
Banks are selling mortgage-backed securities at fastest clip since 2008, thanks in part to years of near-zero rates
New York
JUST outside Columbus, Ohio, the small city of Gahanna seemed to be catching a break in its decade-long struggle to transform an underused strip of downtown into a district of retail shops, high-end condominiums and restaurants.
With a second developer to pick up where a predecessor failed, the project, known as Creekside, found a new backer last year: Wall Street's US$100 billion-a-year securitisation machine for commercial mortgages. A US$25 million loan from UBS Group AG was quickly scooped up with five dozen others, bundled and sold to pension funds and money managers as bonds with ratings as high as AAA.
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