A rash of store closures and bankruptcies last year prompted some investors to bet against debt tied to the retail property sector. So far, at least, the bets haven’t paid off, according to a Wall Street Journal commentary. The wager against commercial mortgage-backed securities largely has focused on the CMBX 6, a little-known credit default swap index that tracks the values of bonds backed by mortgages on malls as well as office buildings and other commercial properties. While a few slices of the index have slumped due to the perceived greater exposure to struggling mall properties and retail bankruptcies, more mall mortgage defaults would have to occur before investors will get a windfall. “Has the bet paid off? Not quite,” real-estate data provider Trepp Inc. said in a recent report. So far, Trepp said, only four loans tied to the CMBX 6 incurred losses, totaling just $4.3 million. Some landlords have refinanced their debt or found new tenants to take up space vacated by departing retailers, according to the commentary. At the same time, some retailers have worked out deals with landlords that allowed the owners to keep up their mortgage payments.
