Tuesday, November 17, 2009

Developers Diversified Sells CMBS
Here is a Reuters article on Developers Diversified's (DDR) sale of three tranches of CMBS. The largest tranche, a $323 million AAA-rated CMBS, was priced to yield 3.8%, which was a lower yield than expected due to high demand. DDR used the government sponsored TALF (Term Asset-Backed Securities Loan Facility). The two smaller tranches, $42.5 million and $3 million, did not use TALF and were priced at 5.75% and 6.25% yields, and came with ratings of AA and A, respectively.

This was the first CMBS deal since June 2008. The level of demand was encouraging. DDR bought one of the Inland REITs a few years ago and if I remember correctly, investors received approximately $12 per share in cash and $2 in DDR stock. The original investment was $10 per share. A large portion of that $12 per share in cash rolled in to Inland's American REIT, and was a primary reason Inland American raised so much money. DDR has also done business with Dividend Capital.

1 comment:

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It is wonderful to read the history of Inland American. In addition, good to read the Reuter’s article via link in the post.