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| Weekly Interest Rate Tracking |
| October 8, 2008 |
Good Afternoon,
Attached is a PDF copy of Colliers Meredith & Grew's interest rate sheet that includes current and historical Treasury, LIBOR and Prime interest rates, which are updated daily with real time data from Strategic Alliance Mortgage.
We provide these updates on a weekly basis to keep our clients and colleagues aware of rate movements. We hope you find this information helpful.
DOWNLOAD INTEREST RATE SHEET (100KB)
The following Market Perspective provides insights and commentary on breaking news and emerging trends in commercial real estate finance.
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Central banks launch co-ordinated rate cuts. October 8 (Financial Times) -- "Central banks around the world announced a co-ordinated cut in interest rates" today, "in response to mounting fears about the impact of the financial crisis on the world economy. The US Federal Reserve (which also cut its rate on direct loans to banks, the so-called discount rate, by a half point to 1.75%), the European Central Bank, the Bank of England, and the central banks of Canada, Switzerland, Sweden and the United Arab Emirates all cut their main lending rate by 0.5%. The People's Bank of China also announced a rate cut of 0.27%. The co-ordinated central bank action, while highly unusual and a strong signal of the authorities' determination to act, is not unprecedented. There was a roughly co-ordinated series of rate cuts around the world following the terrorist attacks in New York in Sep-2001. "It [the rate cut] underlines how seriously they [central banks] are taking the situation and this more than anything should help instill more confidence in the system and lessen some of the tensions in the money markets," said Charles Diebel at Nomura. Earlier, LIBOR rates released before the emergency cut continued to rise, a sign of the ongoing mistrust between financial institutions. The overnight dollar rate surged 144 bps to 5.38%. The Fed's decision brought its benchmark rate to 1.5%.
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Treasuries continue roller coaster ride. Oct. 8 (Bloomberg) -- "U.S. bonds fell after the Treasury Department conducted $50bn in emergency debt sales to ease "severe dislocations" prompted by shortages of government securities amid turmoil in global financial markets". CMG UPDATE: The yield on 2-year Treasuries rose 15 bps to 1.62% at 1:11 p.m., according to SAM (Strategic Alliance Mortgage). "It touched 1.32%, the lowest since March 17". Yields on 10-year notes rose 13 bps to 3.80%, "widening the gap with two-year securities to" 218 bps. "That's the biggest difference since May 2004."
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Colliers Meredith & Grew Perspective. With the continued volatility in the credit markets, life companies that remain active are challenged by current market conditions. Originators at these institutions are poised to pursue new deals but due to a lack of pricing transparency in the marketplace, their ability to price and lock rates on new deals has been frozen (for the most part) by investment committees. As one lender - with substantial capital available for new originations - recently said, "we're like a plane, stuck in a holding pattern and circling the landing strip, just waiting for air traffic control to wave us in for landing". There is certainly still money to be placed - many local commercial banks remain active and quite competitive - but until the markets stabilize it could be a while before air traffic control gives life companies the go-ahead to land.
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| Please contact the Capital Markets Group at Colliers Meredith & Grew with any financing questions.
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Colliers Meredith & Grew is a Boston-based commercial real estate company with integrated service groups including Brokerage, Capital Markets, Counseling & Valuation, Development & Advisory, Investment Sales, and Property & Asset Management. In addition to representing its core clients in New England, Colliers Meredith & Grew provides national and international real estate services to its multi-market clients as a member of Colliers International and as an owner/member of Strategic Alliance Mortgage LLC (SAM). Colliers International is a worldwide affiliation of independently owned and operated companies in more than 290 offices in 61 countries. |
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