Commercial mortgage-backed securities are said to be doing very well in recent weeks, "tightening in tick-for-tick with swap spreads and keeping ahead of it a bit," said one player. Prudential Securities is set to launch a new conduit with Heller Financial next week, and market participants reported that preliminary information was already sent out. Also next week, Lehman Brothers will be out with its upcoming transaction for $907 million, entitled LDCMT99-C2. According to sources, Goldman, Sachs & Co. and Lehman's General Growth Properties-Ivanhoe transaction is priced very attractively, but is not garnering a lot of interest. The price talk on the deal is 50 to 55 over on the five-year triple-A, "which is substantially cheaper when you look at 10-year fixed-rate deals," said a source. "GGP is a pretty well know mall operator, so it is a little surprising that this low-leverage deal is taking so long." In other news, Banc of America is supposedly having trouble with its Atlanta Mart deal, which is still in the syndicate process.
Dallas-based Centex Home Equity Corp. has announced that it completed a $415 million securitization of subprime home equity mortgage loans in August via Centex Home Equity Trust 1999-3, a real estate mortgage investment conduit. CHEC is also the servicer for the loans, which was underwritten by Lehman Brothers, Chase Securities Inc., and Prudential Securities Inc. The mortgage pass-through certificates issued by the real estate mortgage investment conduit trust are insured by MBIA Insurance Corp. CHEC is the subprime lending subsidiary of Centex Corp.
According to market sources, Calabasas, Calif.-based Countrywide Home Loans Inc., saw its mortgage production volume fall to $5.7 billion in August, a 7% decline from July and a 40% falloff from its peak of $9.4 billion in December 1998. In August the company employed 10,862 full-time people, compared with 11,619 in July. One MBS player mentioned that several Countrywide personnel have recently been let go. Despite the dwindling roster, Countrywide is continuing to focus on the purchase-money market and is hiring sales personnel, company officials said. It is also focusing resources on its servicing operations in Plano, Texas, and Simi Valley, Calif., which are quite busy thanks to a decline in servicing runoff.