Market sources reported that a midwestern bank sold a $1.6 billion bid list of seasoned passthroughs last week. The lists were put together by Goldman Sachs in an auction process, and sources indicated that the bank made the sale in an attempt at “delevering”.
“And they’re running out of time,” noted on MBS source who saw the transaction. “The window is shutting.”
Despite the Treasury rally last week as both the DJIA and Nasdaq plunged on earnings concerns in the technology sector, mortgages held on as index and other buyers stepped up to take advantage of the tremendous widening. Near close last Thursday, 30s were flat, while 15s were trailing by about one tick. The $1.6 billion passthrough bid list was readily absorbed by TROR accounts, though it did weigh on the already unsteady market.
Spreads ended the day last Thursday considerably wider, however. Thirty-year 6s through 7.5s moved out three to five basis points, while 8s and higher were six to eight basis points weaker. Fifteens were in similar territory, wider by four to five basis points. The sector again lagged swaps and agencies which were unchanged to slightly weaker on the day.
As of press time, two CMBS bid lists were expected. One was said to total $491 million and consists of $363 million triple-As, $99 million triple-Bs and $29 million double-Bs. A small triple-B bid list surfaced last Thursday: SASC 1995 C1 E, in the amount of $25.8 million. The 2.8-year weighted average life tranche is talked at 99-20/99-28.
The CMBS fixed-rate calendar has grown to four names with expected pricings in the second and third weeks of December. The issues include: GMACC 2000-C3 ($1.28 billion); SBM7 2000-C3 ($915 million); GECCM 2000-1 ($747 million); and LBUBS 2000-C5 ($1.1 billion).
The SSB deal, for $915 million, is backed by loans from Greenwich Capital Markets Inc., SSB, LaSalle Bank NA and Artesia Mortgage Capital Corp. Greenwich, a unit of the Royal Bank of Scotland, contributed most of the loans, with 37% of the pool. The largest loan in the sale is $119.5 million on a Chicago office building.
