Where did Canada’s commercial mortgage-backed securities (CMBS) market go? No one’s trading in it anymore and there’s only five key institutions left to support it.
The answer is, it’s yet another victim of the subprime credit crunch (what else is new?). A few years ago, however, CMBS financed 25% of all new commercial real estate debt in Canada, according to the Financial Post.
Now, with less competition, commercial financing spreads have soared over 1% in the past few months alone. That, of course, is bad news for commercial borrowers.
On the bright side, Canadian CMBS leader and pioneer, Merrill Lynch, says it is still “committed to the business.”
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