Cantor Fitzgerald LP, the bond broker working to transform itself into a full-service investment bank, sold $635 million of bonds backed by commercial mortgages in its first sale of the securities.
The pool of loans includes a $52.4 million mortgage on the Hudson Valley Mall in Kingston, New York, and $41.4 million in debt on Tribeca West in Los Angeles, according to a person familiar with the transaction who declined to be identified because terms aren’t public.
Cantor started its real-estate finance business in September as issuance revived after freezing up in 2008. Banks have arranged about $8.6 billion of commercial-mortgage backed securities this year, compared with $11.5 billion for all of last year, according to data compiled by Bloomberg. JPMorgan Chase & Co. (JPM) is planning a $1.5 billion sale.
The largest AAA slice of New York-based Cantor’s deal, a $304.7 million portion maturing in 4.77 years, yields 125 basis points, or 1.25 percentage points, more than the benchmark swap rate, the person said. A $153.6 million portion of top-rated securities maturing in 9.64 years yields 140 basis points over the benchmark.
Top-rated securities tied to commercial property loans are yielding 1.93 percentage points more than Treasuries, compared with 2.28 percentage points on Dec. 31, according to a Barclays Plc index. Relative yields on the debt were as low as 1.88 percentage points on Feb. 18, the data show.
Issuance may climb to $45 billion this year, according to JPMorgan. Sales plummeted to $3.4 billion in 2009 during the financial crisis from a record $234 billion in 2007, Bloomberg data show.