The political fight over a federal backstop for terrorism insurance on commercial properties may be over, but the issues for owners, bondholders, servicers and the insurers themselves are numerous and complex.
President Bush is expected to sign the bill within days, but how long it will take for the market to react is anyone's guess.
Two other floaters and the GE Capital conduit are due to price this week, as the final flurry of new issuance for 2002 is well under way.
Spreads are out as much as five basis points across the credit spectrum, the first discernable widening since last winter.
The board has decided not to adopt strict rules that could have required buyers of B-pieces to book the entire amount of a CMBS transaction in which they invested.
Expected heavy volume in new issuance for the rest of the year will wait until at least next week to get going. Secondary market activity is light, too, with investors this week concentrating on broader economic activity and the elections.
A bill is set to be signed into law the week of Nov. 11. In the meantime, analysts and the rating agencies are questioning its short-term effectiveness.
The big issue of punitive damage limitations got solved by handing it off to the individual states. Experts are saying a lame duck Congress will have the bill to the president sometime next month.
Punitive damage limitations, the sticking point in an effort to reconcile the House and Senate versions of federal insurance backstop legislation, were said to have been shelved yesterday. Still, no consensus was reached.
The meeting might spur lawmakers to get a reconciled bill to Bush's desk by Oct. 11, when Congress is due to adjourn. In the meantime, holders of some CMBS are nervously awaiting possible downgrades from two of the three rating ...
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