(Bloomberg) — Losses in the commercial property market, which have already sent some banks in New York and Japan into a tailspin, moved to Europe’s biggest economy this week.
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Bonds issued by real estate-focused German lenders slumped after Morgan Stanley analysts recommended clients sell senior bonds issued by Deutsche Pfandbriefbank AG because of its exposure to the CRE market in the US, according to people with knowledge of the matter who spoke on condition of anonymity.
PBB’s junior bonds suffered a record slump on Tuesday but recouped some losses after the bank said on Wednesday it raised risk provisions and reported preliminary pretax profit for the full year that met estimates.
The plunge came as Treasury Secretary Janet Yellen said that losses in commercial real estate are a worry that will put stress on owners, adding that she thinks the problem is manageable. One reason for concern is that…
