For Real Estate Professionals Seeking a Market Edge
SWAP Rates Widen as Greece's Impact is Digested
As Greece's Debt to Gross Domestic Product (GDP) ratio surpasses 150%, their inability to service their current debt load and the country's continued reliance on borrowed funds has threatened a national bankruptcy. Although Greece's GDP is less than significant on a global basis, German and Spanish Banks have been found to be well vested in Greece's government backed bonds. A bailout of Greece will ultimately be a bailout of other European banks.
The cost of borrowing is climbing on a global basis as the impact of Greece's Debt Crisis begins to show ramifications to other European Banks. The 90 Day Inter-Corporate interest rate index European financial companies' use to charge each other grew to its highest mark since August. Traders are paying record amounts for hedges against European bank bond losses.
The favored instrument of corporate and governmental bond credit enhancement, the credit-default SWAP, is a type of derivative used by investors as a hedge against bankruptcy. The favored index of Credit-Default SWAPs, The Markit iTraxx Index, jumped as much as 105 basis points in two days, a 90% increase last week before realizing a 21% rebound.
As borrowing costs climb in Europe, the effect may be felt globally as the situation threatens to slow the economic recovery.
We will keep you posted…
$14,500,000 Medical Office Building Loan Quote
Penstar obtained a $14,500,000 refinance loan quote for a 100,000 square foot medical office building located in the State of Washington. The property is presently 97% occupied with 15 tenants and is less than half a mile from a major hospital campus. Tenant build-outs vary from suite to suite but several are extensively customized. The fixed rate lender provided a 61% loan to value quote at 5.85% on a 25 year amortization schedule. To learn more, please contact Steven Hamermesh at (818) 883-9609 or Hamer@PenstarAdvisors.com.
Helpful Humor
The best antidote for those challenging transactions is to take a moment to have a hearty laugh. Helpful humor is our way of infusing laughter into your work-week
“Economic Pressures”
Faced with economic pressures, many commercial offices are cutting back on costs wherever possible in an attempt to remain profitable. |
30
Day Libor |
10-Year
Treasury |
Prime |
0.34% |
3.54% |
3.25% |
Penstar Realty Advisors can be reached at (818) 883-9609.