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| Weekly Interest Rate Tracking |
| September 18, 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 (172KB)
The following Market Perspective provides insights and commentary on breaking news and emerging trends in commercial real estate finance.
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Fed Liquidity Measures "Short-Term Lifeline...Not a Solution." Sept. 18 (Bloomberg)
"Treasuries fell (today) as central banks around the world injected emergency funds into the financial system in an effort to revive lending, damping appeal for the safety of government debt. The Fed authorized central banks to auction the funds to "address the continued elevated pressures in U.S. dollar short- term funding markets,'' according to a joint release. Policy makers "continue to work together closely and will take appropriate steps to address the ongoing pressures.'' "This is only a lifeline to get them by on a short-term basis,'' said Thomas Tucci, head of U.S. government-bond trading at RBC Capital Markets in New York, in a Bloomberg Television interview. "This is not a solution.'' Two-year note yields climbed from near the lowest since April as the Fed made as much as $247 billion in financing available by expanding swap lending agreements with the European Central Bank, the Bank of Japan and other counterparties. The Treasury will sell $60 bn in bills to support the Fed's liquidity measures. The declines pushed the yield on the two-year note up 6 bps to 1.70% percent at 10:35 a.m. in New York, according to BGCantor Market Data. The yield on the 10-year note rose 4 bps to 3.45%." However, yields on 2-year and 10-year Treasuries had rallied to 1.626% and 3.339% by 11:35 a.m., according to Strategic Alliance Mortgage.
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Central banks announce "coordinated bid to ease the worst crisis facing financial markets since the 1920s." Sept. 18 (Bloomberg)
"Markets welcomed the (Fed's) announcement, which was made in statements from each central bank at 9 a.m. Frankfurt time at the start of European trading. The cost of borrowing dollars overnight slid to 3.84% from 5.03% yesterday. It was 2.15% last week and reached the highest since 2001 on Sept. 15. The cost to hedge against losses on U.S. government debt climbed to a record yesterday."
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"Bush says he's working hard on economic turmoil." Sept. 18 (Drudge Report & Ben Feller - Associated Press)
"The American people can be sure we will continue to act to strengthen and stabilize our financial markets and improve investor confidence," Bush said (today) in two minutes of remarks delivered outside the Oval Office. His remarks Thursday were his first since Monday. And he has spurned every attempt by reporters to ask questions about the developments, including again on Thursday. As he finished his very brief statement and turned to walk back into the Oval Office, a reporter asked if he believed the economy was still sound. The president kept walking. Despite Bush's public stance, the government has taken more and more extensive actions than in decades. Earlier this month, the administration took over mortgage giants Fannie Mae and Freddie Mac. The two struggling companies, which were created by Congress to help people afford home loans, account for about $5 trillion in home mortgages, about half the nation's total."
"At the start of this week, the Federal Reserve rescued American International Group Inc., an insurance giant, from bankruptcy by granting an emergency $85 bn loan. In the historic bailout, the government gets almost an 80% stake in the company, a vastly far-reaching intervention. Then on Wednesday, the SEC tightened rules on short selling, the practice of betting that a stock will fall. And Thursday, the Fed pumped" ($60 bn) "in temporary reserves into the system after coordinated action with the central banks of other nations. The idea was to flood the global markets with a big cash infusion and both moves were designed to prevent credit from drying up and sending the broader economy into virtual paralysis. Still, Lehman Brothers, the country's 4th-largest investment bank, filed for bankruptcy protection this week. A weakened Merrill Lynch, deciding it couldn't go it alone anymore, found help in the arms of BofA. A private business group reported Thursday that the economy's health deteriorated for the 2nd consecutive month in August as building permits dropped and unemployment claims rose. Oil prices are rising again as investors eye U.S. financial turmoil. Employers are cutting payrolls. New applications for unemployment benefits are up, partly due to Hurricane Gustav. The housing market remains unstable."
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Colliers Meredith & Grew Perspective.
Due to volatility in the debt/capital markets, lenders that have been actively pursuing opportunities for new originations have largely been on the sidelines since Monday and are just beginning to reenter the market. Expect underwriting standards to be conservative and pricing to reflect the widening of spreads that has occurred.
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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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