188. Volatility Up, Liquidity Down for Banks & CRE; Office Turmoil; Restructuring Program Needs?
The TreppWire Podcast: A Commercial Real Estate Show
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AT1 Bondholders Take Losses Instead of Equity Holders
"I think that this depositor withdrawal issue hasn't even shown us the tip of the iceberg at this point," he says. "The upside of this is the worst case scenario or the best case scenario is banks just stop lending, but they don't go out of business." The AT1 bondholders took losses instead of equity holders, which blew out credit risk premiums and caused a spike in yield on some bonds. It's hard for CMBS issuers to price risk; who knows where the non-bank sector is right now.
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