Bill’s commentary:
“This is a pretty big OOPS!”
Blackstone Inc. defaulted on a €531 million ($562 million) bond backed by a portfolio of Finnish offices and stores as rising interest rates hit European property values.
Blackstone, which acquired landlord Sponda Oy in 2018, sought an extension from holders of the securitized notes to dispose of assets and repay the debt, according to people with knowledge of the plan. Bondholders voted against a further extension, the people said, asking not to be identified as the sales process was not public.
Property values are dropping in Europe as rising interest rates put off buyers until a clearer picture about how far rates will rise emerges. That’s led to wide gaps between bids and offers, crimping deal volumes and putting pressure on owners with loans that are maturing. About a third of all loans in commercial-mortgage backed securities maturing in 2023 and 2024 face high refinancing risks, according to a study published by Scope Ratings in January.
Bill’s commentary:
“Yet counter-party risk is barely if ever spoken of these days?”
It’s become almost like clockwork: every two weeks we get some news that send Credit Suisse stock to new all time lows.
At the beginning of February, the stock of the second largest Swiss bank plunged after it reported its losses would unexpectedly continue well into 2023 if not 2024, and that the bank run revealed at the end of 2022 was much worse than the bank had previously admitted, prompting some analysts to call it “staggering.”
Bill’s commentary:
“Simple math, higher interest rates foisted upon the most over levered system in all of history will be a death knell!”
The average rate on the 30-year fixed mortgage jumped back over 7% on Thursday, rising to 7.1%, according to Mortgage News Daily.
Growing fears that inflation is not cooling off are pushing bond yields higher. Mortgage rates loosely follow the yield on the U.S. 10-year Treasury.
“Rates continue to move at the suggestion of economic data, and the data hasn’t been friendly. This is scary considering this week’s data is insignificant compared to several upcoming reports,” said Matthew Graham, chief operating officer at Mortgage News Daily.
Bill’s commentary:
“”One is none, two are one …and three are unstoppable”! I know the price tag sounds stupid crazy and I thought so too, but what is the value of your family’s lives or your own for that matter?”
Before Arteom Bulgadarian bought his Sherman Oaks home, it belonged to baseball star Yasiel Puig, who was burglarized of $170,000 worth of jewelry and other items while he was out of town.
So Bulgadarian, 44, has been vigilant about security since moving in, especially with three young children and a job running an aerospace manufacturing company that often necessitates late nights at the office. He owns several guns and has equipped his nearly 5,000-square-foot, six-bedroom house, set behind an iron gate, with surveillance cameras and an alarm system. A neighborhood watch group patrols the area around the clock.
And then there’s Rocky.
BillHolter.com 