Mortgage Bonds Investors Get Some Payments After Dustup That Shook Market
- Servicer releases $105 million of funds that were held back
- Move raised specter of new risks if defaults start to mount
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It was a move that rattled the commercial mortgage-backed securities market: the firm brought in to wind down a deal tied to an ill-fated apartment venture held onto more than $160 million that bondholders were expecting to get back.
The maneuver threatened to foist losses on even highly rated chunks of the securities. And it drew widespread attention by raising the risk that the tactic would become more common if the commercial real estate industry’s strains push other deals into default.