Royal Bank of Scotland Grp. Plc New (The) Ads (NYSE:RBS)
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RBS and Wells Fargo Securities plan to sell more than $1 billion of commercial mortgage-backed securities next week, according to a term sheet sent to investors Tuesday.
The issue comes after risk premiums in the CMBS market have jumped, with investors shedding riskier assets on concern the European sovereign debt crisis will disrupt financial markets. The risk premium on the top rated, new CMBS has climbed to 150 basis points over interest rate swap rates in recent weeks from a low of 120 basis points in March, according to Credit Suisse.
RBS, Wells Fargo, Basis Real Estate Capital, Liberty Island Group and C-III Commercial Mortgage provided the loans for the CMBS. More than 57% are on retail properties.
About $865 million of the loan will be publicly offered, according to investors. The remainder will be sold in the private 144A market.
-By Al Yoon, Dow Jones Newswires; 212-416-3216; email@example.com