UPDATE:Developers Diversified Offers $400 Million Comml Mtge TALF Deal
November 09 2009 - 10:36AM
Dow Jones News
Property owner Developers Diversified Realty Corp. (DDR) is in
the market with a much-anticipated commercial mortgage-backed
securities deal.
The bond, dubbed 2009-DDR1, is eligible for financing under the
Federal Reserve's program to boost the commercial mortgage-backed
market and is the first newly created CMBS deal in more than a
year.
"It's finally here," said Jim Harrington, a senior portfolio
manager at Ryan Labs Asset Management in New York. "There's no more
mystery about it. This deal will be used as a beacon and every
other will be compared to it."
Earlier this month, the Cleveland, Ohio-based developer said it
had closed on a new first mortgage financing from an affiliate of
Goldman Sachs Group Inc. (GS). The five-year loan is secured by 28
shopping centers. The geographical distribution is 19 states.
Because it is "100 percent retail," investors will think long
and hard about buying it, Harrington said.
Even so, market participants have been waiting eagerly for a
CMBS deal so they will give it "a good, hard look," he said.
Goldman Sachs is lead manager on the deal, which has three
tranches. The largest is a triple-A rated tranche worth $323.5
million, with a duration of 4.69 years.
The deal is being marketed in time for the next round of
financing under the Fed's Term Asset-Backed Securities Loan
Facility, or TALF. The deadline for cheap loans to buy new and
existing CMBS is Nov. 17.
The deal is expected to be sold on Nov. 16, according to a term
sheet.
-By Anusha Shrivastava, Dow Jones Newswires; 212-416-2227;
anusha.shrivastava@dowjones.com
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