BlackRock Financial Management's Anthracite Europe 2006-1, the first commercial real estate (CRE) CDO, backed by CMBS, B/C loan notes and other real estate debt priced last week. Dealers expect more CRE CDO transactions to emerge, providing exposure to diversified real estate risk (ASR, 11/20/06).
"With no direct comparables, spread performance is difficult to assess," Commerzbank said. "However, the asset class' novelty value and Blackrock's pristine reputation (enhanced by its access to Merrill's real estate assets) seem to have enabled competitive pricing. Indeed, although triple-A spreads were relatively aligned with recent CDOs of ABS, spreads lower down the capital structure came inside Collineo's CDO of high-grade ABS."