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Banks In Talks to Bundle $1.5B of CMBS

NEW YORK CITY-Citigroup, Deutsche Bank AG, Guggenheim Securities LLC and UBS AG are discussing to combine their commercial mortgages and sell them as bonds.

By Jacqueline Hlavenka | Updated on October 14, 2011

NEW YORK CITY-As the value of malls, office towers and other commercial properties continue to fluctuate given market volatility in Europe and the US, banks are continuing to reconsider and re-tool their CMBS originations. Bloomberg reported late Thursday that Citigroup Inc., Deutsche Bank AG, Guggenheim Securities LLC and UBS AG are in talks to bundle $1.5 billion worth of commercial mortgages and sell them as bonds.

Bloomberg said the plans are only preliminary, but if the deal is completed, sources say it could have financial benefits. Tom Fink, managing director of Trepp LLC, tells GlobeSt.com that the current volatility in interest rates makes it “very difficult” for lenders to originate loans and hold them on their balance sheets, making it harder to accumulate a big enough pool to do a deal on their own.

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