Thursday, Oct 22, 2009

Commercial Property loss hits Banks (list)

Bloomberg: Commercial Mortgage Backers Face $1.6 Billion Loss

"Investors in the first U.K. commercial mortgage bonds to be liquidated since the financial crisis began may lose as much as 1 billion pounds ($1.6 billion) after values of properties backing the two deals collapsed. Epic (Industrious) Plc issued bonds on 1,500 warehouses, which fetched 44 percent of their peak value in sales that completed this month. Banks, insurers and pension funds that hold the bonds face losses from the 35 billion euros ($52 billion)...."

Posted by alan @ 02:46 PM (1398 views)
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1. mark wadsworth said...

Excellent, this is how it should be - losses on loans are passed straight on to the investors. It's another kind of debt-for-equity swap, in this case, the negative equity on the property is deducted from redemption value on loans.

Thursday, October 22, 2009 04:53PM Report Comment
 

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