New York Fed Owned Real Estate Roils Markets

Bloomberg reports:

A $7.49 billion mass of real-estate debt assumed by the Federal Reserve Bank of New York in 2008 is weighing on the commercial-mortgage bond market, exacerbating a slide in values as Europe’s debt crisis flares and doubts mount about the strength of the U.S. economy.

Relative yields on securities tied to shopping malls, skyscrapers and hotels have climbed to 206 basis points as of April 10, a six-week high, from a more than four-year low reached March 27, according to a Barclays Plc index. The 29 basis-point widening compares with a 17 basis-point rise in a Bank of America Merrill Lynch corporate bond index.