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Big $1.8B Sale Of Blackstone Bonds Overshadowed By Weak CMBS Market


Citigroup and Goldman Sachs have sold roughly $1.8B in bonds linked to Blackstone’s October acquisition of BioMed Realty Trust, a rare bright spot in a CMBS market that’s had a rough start in 2016.

Last year saw roughly $100B of CMBS issued, while this year is projected to see only $60B to $75B.

Part of the reason the offering might’ve sold so well, however, is Blackstone’s reputation as a savvy borrower, Bloomberg reports.


“It speaks to a flight to quality in a market where people have heightened credit concerns,” Ed Shugrue, CEO of debt investor Talmage, tells Bloomberg.

The BioMed bond sale should help to ease the backlog created from last year's $14B in debt issued—one of the factors slowing down CMBS in 2016.


Citigroup and Goldman sold a $417M slice of the BioMed debt as AAA bonds with a spread of Libor plus 165 basis points.

Part of the reason Blackstone bought BioMed in the first place is the recent steep discount on REIT stocks relative to the market value of their property. [Bloomberg]