Pimco Takes 70% Loss on AAA Philadelphia Office Debt

US Markets26 days ago

The sale of a two-tower commercial property in downtown Philadelphia has decimated the value of associated mortgage-backed securities. The assets sold for $70 million, a steep drop from a $471 million appraisal in 2019, after occupancy rates plummeted from 93% to 28%.

Pimco is facing losses of around 70% on a AAA rated security linked to the complex. While the AAA tranche is trading at about 45 cents on the dollar, all lower-rated tranches in the commercial mortgage-backed security have been wiped out.

Mapped to your portfolio

Possible scenarios

38%Contained Valuation Reset-0.1%
27%AAA CMBS Reprices-0.5%
20%Workouts Accelerate-0.1%

Each figure is the modeled move of the S&P 500 if the outcome occurs. For information only. Not investment advice.

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Pimco Takes 70% Loss on AAA Philadelphia Office Debt

In this story

PIMCO Philadelphia

Portfolio

SPY
State Street SPDR S&P 500 ETF Trust
100%

Portfolio

SPY
State Street SPDR S&P 500 ETF Trust
100%

Mapped to your portfolio

Possible scenarios

38%Contained Valuation Reset-0.1%
27%AAA CMBS Reprices-0.5%
20%Workouts Accelerate-0.1%

Each figure is the modeled move of the S&P 500 if the outcome occurs. For information only. Not investment advice.