Goldman Sachs Group Inc. (GS) and
Citigroup Inc. (C) are planning to market about $1 billion of bonds
backed by commercial property loans as soon as next week as
demand for the debt recovers amid optimism the U.S. economy can
withstand Europe’s fiscal crisis.
The deal will probably be the first of its kind for 2012,
according to people familiar with the offering, who declined to
be identified because the transaction hasn’t been announced. The
New York-based banks last sold similar debt in September, when
they issued $1.7 billion in securities tied to shopping malls,
hotel and office mortgages, according to data compiled by
Bloomberg.
Banks pulled back from making new loans to package into
bonds in July as Europe‘s debt crisis roiled credit markets and
sent relative yields soaring. Originations have since picked up,
according to a Standard Poor’s report last month. The ratings
company is forecasting $35 billion in 2012 sales.
Michael DuVally, a spokesman for Goldman Sachs in New York,
declined to comment. Scott Helfman of Citigroup, also in New
York, declined to comment.
The extra yield investors demand to own top-ranked
commercial-mortgage bonds rather than Treasuries has declined 85
basis points to
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