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In recent weeks, banks have stepped up efforts to prevent such losses, according to commercial real estate (CRE) analysts and industry data. The 23 largest U.S. banks held 20% of office and downtown retail CRE loans, according to the U.S. Federal Reserve. Small banks also have high exposure to CRE loans as a percentage of their assets. About $2.1 billion of office loans pooled in CMBS matured in May, almost double the total amount from January through April, for example. If borrowers agreed to loan extensions, some $10.8 billion of office loans maturing this year would be pushed to later years, Moody's said.

Persons: Shaishav Agarwal, Agarwal, Steve Jellinek, Moody's, Kevin Fagan, Fagan, ” Fagan, Eliasaf, ”, Banks, Shankar Ramakrishnan, Matt Tracy, Paritosh Bansal, Nick Zieminski Organizations: U.S, Deutsche Bank, U.S . Federal, Manhattan, Northwind, Thomson Locations: York

Unibail-Rodamco-Westfield (URW.PA) said late on Monday it will transfer its Westfield San Francisco shopping mall to lenders. The announcement followed Park Hotels & Resorts (PK.N) statement last week that it ceased making payments toward a $725 million mortgage linked to its Hilton San Francisco Union Square and Parc 55 hotels. Westfield's decision is the latest blow to San Francisco, the once-booming tech hub that has been particularly hard hit by the pandemic. The potential for difficulties from commercial real estate to flow through to banks is also becoming a bigger worry for investors and regulators. Warren Wachsberger, CEO of Aecom Capital, a real estate investor, said mall owners like Unibail-Rodamco-Westfield are focusing on their best properties.

Persons: Thomas LaSalvia, Warren Wachsberger, we're, Wachsberger, Granth, Shankar Ramakrishnan, Matt Tracy, Sriraj Kalluvila, Alexandra Hudson Organizations: Westfield San, Resorts, Hilton San Francisco, Square, downtown, Real Estate Economics, Aecom, Westfield, U.S, Flagship, Nordstrom, Banana Republic, Washington DC, Alexandra Hudson Our, Thomson Locations: San Francisco, Westfield, Westfield San Francisco, downtown San Francisco, Bengaluru, New York, Washington

Investment-grade rated companies issued $152 billion in May, making it the busiest May since 2020 when the pandemic crisis prompted record debt issuance volumes, according to data from Informa Global Markets. "I believe we have seen an acceleration of issuance into May," said Richard Wolff, head of US bond syndicate at SG CIB, saying this was a result of debt issuance being pulled forward. This debt issuance spree is on the back of strong demand for what were relatively higher yielding corporate bonds after Treasury yields rose in May from levels touched in late April. New investment-grade bonds in May received orders that were three to four times the offering size on average, according to IGM data. CHANGING TIDEThe debt binge, however, gave a broad hint that the largest companies in the world are not optimistic on borrowing conditions later in the year.

Persons: Richard Wolff, Wolff, Manuel Hayes, Jessica Lehmann, Blair Shwedo, Jiyann Daemi, Shankar Ramakrishnan, Matt Tracy, Laura Matthews, Megan Davies, Matthew Lewis Organizations: YORK, U.S, Investment, Informa Global, Junk, SG CIB, London, Insight Investment, Treasury, HSBC, U.S . Bank, IG, TD Securities, Thomson Locations: New York

While loans can be cheaper than issuing bonds, shorter-term debt is currently more expensive than longer tenors. Typically companies take a bridge loan to fund mergers but then pay it down with a long-dated bond issue before closing. The tech giant also doubled the size of its commercial paper program to $6 billion and said that it could expand the size of the term loan to $6 billion. "If a term loan is necessary due to timing of the deal closing, we expect to pay it back quickly," the company said. In the market for junk bonds, for example, some companies are paying higher rates to raise funds.

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