Goldman Sachs 'may restart commercial-mortgage bond sales'

9 October 2009

Goldman Sachs has given a $400 million loan to an Ohio real-estate company in a move analysts believe may lead to the commercial-mortgage bond market being restarted.

No sales of commercial-mortgage backed debt have been completed since June 2008, according to Bloomberg data.

But the new five-year loan with Developers Diversified's Realty Corp, which is secured against 28 shopping centers, may be a signal for the market to begin again.

The Goldman Sachs money is being used by the company as a way of paying off some of its outstanding debts.

David Oakes, Developers Diversified vice president of finance and chief investment officer, said: "We are pleased to announce continued progress raising long-term capital to retire short-term debt."

In 2007 the commercial-mortgage bond market was worth $237 billion but this fell to just $12 billion in 2008 as the credit crisis hit.

But Goldman Sachs has come out of the crisis well and is expected to announce massive third-quarter profits on October 15th 2009.

By Asim Shah

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