Bernanke CMBS Curveball

Commercial MBS prices slid again this week amid volatility in the broader fixed-income market, causing headaches for dealers planning to price four offerings before the end of the quarter.

One of those transactions, a $1.5 billion offering by Morgan Stanley, Bank of America and CIBC, was slated to price by the end of this week. But the timetable was thrown into doubt after Federal Reserve Chairman Ben Bernanke roiled the stock and bond markets on Wednesday by suggesting the central bank might scale back its aggressive bond-buying program later this year.

Price guidance hadn’t been released by yesterday afternoon, and investors said dealers were still struggling to determine the appropriate triple-A spreads. The spread on benchmark CMBS bonds has widened significantly in the past few weeks.

This is an excerpt from Commercial Mortgage Alert. Click here to visit their website.