Origination

Seventeen classes in 12 net-interest-margin mortgage securities from three issuers have been downgraded by Fitch Ratings. The affected securities were as follows: nine classes from seven First Franklin NIM issues; seven classes from four Park Place Securities Inc. NIM Trust issues; and one class from a Merrill Lynch Mortgage Investors NIM Trust issue. The rating agency said the actions "reflect actual pay-down performance of the NIM securities to date compared to initial projections, as well as changes that Fitch previously made to its subprime loss forecasting assumptions for the underlying transactions."

Senior Housing Properties Trust, a real estate investment trust based in Newton, Mass., has priced a public offering of 17 million common shares of beneficial interest at $21.09 per share. The joint book-running managers of the offering are UBS Investment Bank, Merrill Lynch & Co., and Morgan Stanley. The REIT said it has granted the underwriters an option to buy up to 2.55 million additional shares to cover any overallotments. The company can be found online at http://www.snhreit.com.

The liquidity of U.S. equity real estate investment trusts is likely to strengthen in the coming months, according to Fitch Ratings. In a new report, Fitch cites recent unsecured bond issuances from several equity REITs as evidence that access to capital via public debt and equity markets has increased in recent months. Steven Marks, managing director and head of Fitch's U.S. REIT Group, pointed to the recent unsecured bond issuances and added that another advantage for equity REITs is that "large REITs remain well positioned to weather an environment of reduced capital access given limited unsecured debt maturity exposure and limited refinance risk." The new report, "Liquidity of U.S. Equity REITs Strengthening," also comments on the liquidity profiles of U.S. equity REITs rated by Fitch. The rating agency can be found online at http://www.fitchratings.com.

Capital Trust Inc., New York, has announced that $667 million in commitments has been raised from two institutional investors to form CT High Grade Partners II LLC, which will invest in "high-grade" commercial real estate debt. The fund will be managed by CT Investment Management Co., Capital Trust's wholly owned investment management subsidiary. Capital Trust, a real estate investment trust that specializes in investment management and finance, can be found on the Web at http://www.capitaltrust.com.

Two classes from Argent Net Interest Margin 2006-M1 have been downgraded by Fitch Ratings. Class N1 was downgraded from BB to C/DR6, and class N2 was downgraded from B to C/DR6. "The rating actions reflect actual pay-down performance of the NIM securities to date compared to initial projections, as well as changes that Fitch previously made to its subprime loss forecasting assumptions for the underlying transactions," the rating agency said.

Mack-Cali Realty, a real estate investment trust based in Edison, N.J., has been designated the "Bear of the Day" for June 3 by Zacks Equity Research, Chicago. The Bear of the Day is a stock expected to underperform the markets over the next three to six months. Zacks said the office REIT "will have a difficult time holding steady occupancy and increasing rents" and that suburban office landlords are expected to "have a tough time in 2008." Zacks can be found online at http://www.zacks.com, and Mack-Cali can be found at http://www.mack-cali.com.

The Mortgage Industry Standards Maintenance Organization has announced the release of its Version 1.2 Commercial Reference Model containing specifications for data fields used in commercial standards. Version 1.2 augments three commercial standards released in February by the Environmental and PCA Reports Workgroup, MISMO said. "It provides a combined snapshot of the content for all of MISMO's commercial standards, and shows how all the pieces fit together," said Dan Szparaga, executive vice president of MISMO. "As new standards are released, it will be evident where the new content fits within the model and how logical and orderly it is for the industry's use." MISMO is a not-for-profit subsidiary of the Mortgage Bankers Association that develops data transfer protocols for the residential and commercial real estate finance industry. It can be found online at http://www.mismo.org.

The Eleventh Federal Home Loan District Cost of Funds Index stood at 3.111% for April, down 17 basis points from the level recorded for March. The decline represents the fifth consecutive monthly decrease of more than 10 basis points by COFI, which is a weighted-average calculation performed by the Federal Home Loan Bank of San Francisco. Since hitting its latest peak in September 2007, COFI has declined 127 bps. The index stands at its lowest point since November 2005, but still has a way to go to reach its all-time low. That took place in May 2004, when the index stood at 1.708%. COFI is computed from the actual interest expense reported for a given month by the Arizona, California, and Nevada savings institution members of the FHLBank-SF. According to the bank, the average funds used to calculate COFI totaled $407.4 billion in April (of which $239.1 billion came from deposits), while the total interest expense was $1.06 billion.

Federal Reserve Board Chairman Ben S. Bernanke says he expects economic conditions to improve in the second half of this year, but that the housing market will continue to be a problem. "Until the housing market -- and particularly house prices -- shows clearer signs of stabilization, growth risk will remain to the downside," the Fed chief told an international monetary conference in Barcelona, Spain. The precipitous decline of residential construction over the past two years should be less of a drag on the economy, he said. In addition, Fed officials expect that the monetary and fiscal stimulus already in the pipeline, along with further progress in the repair of the financial and credit markets, will help the economy. "This baseline forecast is consistent with our recently released projections, which also see growth picking up in 2009," Mr. Bernanke said.

Thornburg Mortgage Inc., a troubled real estate investment trust based in Santa Fe, N.M., has announced that it needs more time to file its first-quarter earnings report with the Securities and Exchange Commission and estimated that it will do so by June 12. The company previously estimated that it would file the report by June 2. To finalize its Form 10-Q, the company said it must, among other things, complete its valuation analysis and the accounting for a March 31 senior subordinated secured note transaction. (Thornburg completed a $1.35 billion private placement at that time after announcing that it had to raise nearly $1 billion in capital to keep in place a key 364-day agreement with certain counterparties involved in potentially "material" margin calls it had been facing.) The company has also announced receipt of a letter from the New York Stock Exchange stating that the company is not in compliance with the NYSE's continued-listing criteria because the average closing price of its common stock has been less than $1 for 30 consecutive trading days. Thornburg said it intends to cure the deficiency by implementing a reverse stock split. It can be found online at http://www.thornburgmortgage.com.