"It's a great execution for the borrower," says Scott Simon, managing director and head of mortgage- and asset-backed securities portfolio manager at Pimco, a leading bond house. "If other real-estate investors can borrow money at that rate, it would be a real game changer for the commercial real-estate market that has been so devoid of financing."I wouldn't buy it at a 4% yield. However, the new issue machine has officially had most of the dust bunnies blown off and someone flipped on the switch. It's not just Goldman taking the leap, JP Morgan has started warehousing loans for an issue scheduled for early next year. I'm sure others have started to test the water as well.
Spreads responded positively. Spreads on the A4 class have tightened over 100 bps since their wide during the first week of the month.