For the first time since the end of the financial crisis, Deutsche Bank and JP Morgan have teamed up to underwrite an $818M commercial mortgage bond by themselves.
Most conduit deals in the past five years have put in collateral from smaller, non-bank lenders known for risky loans, but banks are shifting tactics as the $600B CMBS market struggles to find its footing again.
Wells Fargo was able to thin out spreads with a smaller $712M transaction that included small lenders, Reuters reports. Investors in the Deutsche-JP Morgan deal hope the absence of small lenders will make it easy to build on Wells Fargo’s thin spreads.
"The expectation is that JP Morgan and Deutsche Bank will come in the same vicinity of the Wells Fargo deal," one source said. [Reuters]
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