AllianceBernstein Holding LP (AB) is buying the riskiest slice of a commercial-mortgage bond transaction for the first time as sales soar of debt tied to skyscrapers, hotels and shopping centers.
The investment manager is teaming with Raith Capital Partners, a New York-based real estate debt firm, in purchasing the B-piece, designated as the first to take any losses, in an upcoming deal from Goldman Sachs Group Inc., said two people familiar with the transaction, who asked not to be identified because it hasn’t been announced.
Lured by higher returns with the Federal Reserve (FDTR) holding benchmark interest rates at about zero percent since 2008, AllianceBernstein is joining hedge funds Saba Capital Management LP, Ellington Management Group LLC and Perella Weinberg Partners LP in making debut B-piece purchases this year.
Investors in those portions traditionally included real estate specialists such as Rialto Investments and Eightfold Real Estate Capital, which last year purchased 16 of the 27 B-pieces issued, according to data from Deutsche Bank AG.
Representatives from AllianceBernstein, Raith and Perella didn’t immediately return telephone calls seeking comment and spokesmen at Goldman Sachs, Saba and Ellington declined to comment.
Sales of commercial mortgage-backed securities are poised to climb by more than 50 percent to $70 billion in 2013, according to Credit Suisse Group AG. Banks have arranged about $36.6 billion this year, according to data compiled by Bloomberg.
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