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CMBS Division Likely to Close at Credit Suisse

Financial institution ""Credit Suisse"":www.credit-suisse.com/us/ is set to shut down its commercial mortgage-backed securities division following major rumors of approaching layoffs. The overall impact of the global economy and dropping property values in the commercial sector during the second and third quarters are also believed to have played a role.


According to the _Wall Street Journal_, Credit Suisse's executive of securitized products, Albert Sohn, held a meeting on Wednesday to announce the likely firing of 50 people working as part of the company's commercial real-estate team. Sohn went on to tell the employees present that, as Credit Suisse continues to evaluate its downsizing plans, the entity will be handing down an official decision regarding the securities division within 30 days.

Holding court at the New York-based corporate offices for Credit Suisse, Sohn added that those working in commercial


securities were banned from initiating new loans and utilizing any company funds to interact with current clients. The latest round of human resources roulette comes on the heels of layoffs within Credit Suisse's investment bank during June, and though the entity recently hired additional staffers, most of whom were to report to the office this Monday, it's probable that none of the new employees will actually take up their positions as planned.

To date, the Credit Suisse group charged with making loans within the company's rebooted commercial mortgage-backed securities department was believed to have executed around $1 billion in total loans. However, the _Wall Street Journal_ reports that almost none of the debt from those loans has made it to securitization.

An anonymous source speaking to the paper noted that Credit Suisse will carry on trading commercial mortgage-backed securities, though the individual did not know what format the company might use to continue the facilitation of securitization-based sales. Credit Suisse has, seemingly, confirmed its continued participation in secondary trading according to Reuters.

Credit Suisse has failed to put together a commercial mortgage-backed securities deal so far this year, though the division did conduct loans functioning as part of other transactions. Credit Suisse's closure of its commercial mortgage-backed securities division is in line with the broader marketplace, which has been stalled this year despite highly optimistic analyst predictions in early 2011 that indicated the market would double numbers recorded in 2010.

About Author: Abby Gregory


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