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Industry News

Eurozone's debt talks boost U.S. CMBS market
Spreads in the commercial mortgage-backed securities market in the U.S. tightened as Europe negotiated a resolution to its sovereign-debt crisis, and investors are returning to the market. "We have really seen a number of clients return to legacy assets," a CMBS trader said. For a while, CMBS was lagging competing asset classes pretty dramatically. It kind of led the way down and then, when high yield and other asset classes started to recover, our market really lagged. Today, that has really changed." Structured Credit Investor (U.K.)(10/27)

Greek plan prompts questions about sovereign CDS
European officials struck a deal for holders of Greek debt to take 50% haircuts on their investments. The voluntary debt exchange is intended to avoid triggering credit default swaps, raising questions about the value of sovereign CDS, which banks and other entities use to hedge exposure to sovereign debt. Some dealers say the plan for Greece undermines the use of sovereign CDS to hedge. International Financing Review(10/27), The Wall Street Journal (tiered subscription model)(10/28), Bloomberg(10/28)

SIFMA survey shows increased expectations for Treasury issues
SIFMA members said in a surveythat they expect the Treasury to issue roughly $363 billion worth of securities in the fourth quarter, after issuing $234.3 billion in the third quarter. The Treasury is expected to issue nearly $308 billion in notes and bonds, and $55.5 billion in bills. Read the SIFMA news release. Bloomberg(10/27), The Bond Buyer (special access for readers of SIFMA SmartBrief)(10/27)

Judge questions SEC's proposed settlement with Citigroup
A federal judge scheduled a Nov. 9 hearing for the Securities and Exchange Commission and Citigroup to explain why he should approve their proposed $285 million settlement over a mortgage-bond deal. "Why should the court impose a judgment in a case in which the SEC alleges a serious securities fraud, but the defendant neither admits nor denies wrongdoing?" U.S. District Judge Jed S. Rakoff wrote. The Wall Street Journal (tiered subscription model)(10/28), The New York Times (tiered subscription model)/DealBook blog(10/27)