Bonds backed by commercial properties are proving popular with investors looking to restructure bad debt, it is claimed.
Commercial mortgage-backed securities appear to be experiencing something of a renaissance as
property investment firms try to restructure mountains of bad debt.
According to an article in the Financial Times (FT), an active market for bonds backed by
commercial development assets is beginning to re-emerge, attracting a lot of investor interest.
This wave of new debt is vital to help cover the problems of the high loan-to-value deals taken out in the property boom, the publication claims.
The UBS banking group has already beefed up its real estate debt team as more and more companies look to restructure.
Fergus Horrobin, joint head of real estate at UBS, told the FT: "We are scaling up ahead of the refinancing requirement – we can see both increased borrower and investor requirements but the two do not match up quite yet in the pricing in the market."
Research from the Forum of Private Business earlier this month warned that companies using commercial property as security for business loans are finding that most banks are undervaluing their assets.
Posted by Tess Nelson.
Latest News 
