Commercial-Mortgage Bond Rally Stalls as Fannie Mae Sells Debt
This article is for subscribers only.
A commercial-mortgage bond rally that pushed values up as much as 25 percent this year is stalling as planned sales from Fannie Mae threaten to overwhelm investors.
Prices on a Markit Group Ltd. CMBX index used as a gauge of demand in the $550 billion market for securities tied to shopping malls, skyscrapers and hotels fell to 75.3 cents on the dollar yesterday, the lowest in almost three weeks. The index, linked to securities rated AAA when issued in 2007 that have since been cut to junk, reached a two-year high of 78.9 cents on May 8.