by LJ Miehe on September 28, 2011
According to this article, a “fire-sale” in euro is happening for the commercial real estate market. As could be guessed, the countries that are shedding this paper are banks in Ireland and Spain, along with countries that helped finance or have exposure to these markets like Britain and Germany. It is stated that some of these properties are going for as low as 20% of face value. That says volumes, either these investors are feeling impaired with these assets or they are wildly over-valued.
De-leveraging is mentioned as a motivation as well, this could point to some distressed institutions that need to raise capital fast. If the Greek bailout falls apart, we will see more turmoil in the global markets and that will accelerate the amount of assets that will be shed into the market, putting more pressure on prices. For people with capital on the side-lines, opportunities will be arriving in mass most likely sooner than later. Keep you posted.
BusinessWeek (Simon Packard) Banks will sell about 15 billion euros ($20 billion) of loans secured by commercial property in Europe through 2012 as they anticipate tougher capital regulations, debt adviser Situs Cos. said.
[click to read more…]
by LJ Miehe on September 26, 2011
Bank of America is shedding assets to strengthen its balance-sheet and increase their cash position. With the ongoing turmoil associated with lawsuits against the national bank, they are preparing for any large judgements or losses tied to alleged fraud on mortgage documents and improper procedures. This is so large scale and pervasive, BofA will most likely take more losses in the future. With this reduction, BofA can focus on its core businesses which are quite profitable when manged correctly.
It is in our best interest to have more, smaller banks instead of huge global financial complexes. It doesn’t make me feel better that the place I deposit my savings, is doing high-frequency trading, off-balance sheet etc… and dark pools?!? We need to get back to fundamentals so we can “get on with it”. Banks are banks and Investment Banks are investment banks.
Wall Street Journal: Bank of America Corp. has reached an agreement to sell an approximately $880 million portfolio of commercial mortgages at a discount of 20% to 25% off the face value, according to a person familiar with the deal.
[click to read more…]
