Looser Standards Threaten Lower-Ranking Commercial-Mortgage Debt
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Investors adding the riskiest portions of newly issued commercial-mortgage bonds should be cautious as underwriting standards slip, according to Bank of America Corp.
Wall Street banks and rating companies are competing to win business in the $550 billion market for bonds tied to shopping malls, office buildings and hotels as sales rise, leading to looser loan terms for borrowers, Bank of America Merrill Lynch analysts said in an Oct. 21 report.