<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN"> <HTML><HEAD> <META http-equiv=Content-Type content="text/html; charset=iso-8859-1"> <META content="MSHTML 6.00.2715.400" name=GENERATOR> <STYLE></STYLE> </HEAD> <BODY bgColor=#ffffff> <DIV><FONT face=Georgia color=#000080>nuts.   there goes the neighborhood.</FONT></DIV> <DIV> </DIV> <BLOCKQUOTE style="PADDING-RIGHT: 0px; PADDING-LEFT: 5px; MARGIN-LEFT: 5px; BORDER-LEFT: #000080 2px solid; MARGIN-RIGHT: 0px"> <DIV style="FONT: 10pt arial">----- Original Message ----- </DIV> <DIV style="BACKGROUND: #e4e4e4; FONT: 10pt arial; font-color: black"><B>From:</B> <A title=laflame@aaahawk.com href="mailto:laflame@aaahawk.com">pms</A> </DIV> <DIV style="FONT: 10pt arial"><B>To:</B> <A title=lbo-talk@lists.panix.com href="mailto:lbo-talk@lists.panix.com">lbo-talk@lists.panix.com</A> </DIV> <DIV style="FONT: 10pt arial"><B>Sent:</B> Thursday, April 18, 2002 7:28 PM</DIV> <DIV style="FONT: 10pt arial"><B>Subject:</B> Corporate Welfare or Credit Crunch</DIV> <DIV><BR></DIV><BR><BR>US CMBS Market Hit By Terrorism Insur Costs, Canceled Loans<BR><BR>WASHINGTON -(Dow Jones)- Large lenders have either postponed or canceled<BR>more than $7 billion in commercial mortgage loans because they can't get or<BR>can't afford the lofty prices for terrorism insurance, according to a survey<BR>released Thursday by The Bond Market Association.<BR>TBMA estimates that another $36 billion in loans could fall by the wayside<BR>this year if Congress doesn't intervene with some sort of federal backup for<BR>U.S. insurers in the event of a future terrorist strike.<BR><BR>"The potential exists for a major crunch if something is not done," said<BR>Mike Williams, a TBMA vice president.<BR><BR>Large commercial mortgage loans totaled $73.8 billion last year, with $72<BR>billion resold on the secondary markets as commercial mortgage backed<BR>securities.<BR><BR>"The $7 billion in loans on hold or canceled so far this year likely means<BR>$7 billion less in CMBS will be issued in 2002...the actual number of<BR>incomplete deals - and lost CMBS issuance - could be even higher," reads a<BR>summary of the survey.<BR><BR>Williams said that the market is still expecting Congress to do something<BR>this year. The longer the industry goes without adequate terrorism<BR>insurance, the worse it gets for developers seeking financing.<BR><BR>"The lack of terrorism coverage can place the property owner in technical<BR>default on their loans. This could lead rating agencies that monitor the<BR>pools of mortgages underlying CMBS to downgrade the credit quality of the<BR>securities," according to the bond trading group.<BR><BR>The industry is waiting for the Senate to act on legislation that created a<BR>federal insurance program in case there is another large-scale terrorist<BR>attack. The House has passed its own terrorism insurance bill last year.<BR><BR><BR><BR><BR>  -By Dawn Kopecki, Dow Jones Newswires; 202-862-6637;<BR><A href="mailto:Dawn.Kopecki@dowjones.com">Dawn.Kopecki@dowjones.com</A><BR>  (This story was originally published by Dow Jones Newswires)<BR>  Copyright (c) 2002 Dow Jones & Company, Inc.<BR>  All Rights Reserved<BR><BR><BR></BLOCKQUOTE></BODY></HTML>