According to Bloomberg, Goldman Sachs Group (GS) pulled a loan from a commercial-mortgage bond deal sold last week after investors balked at the debt, fearing the underwriting standards were not up to par.
The $47.5 million loan, linked to 10 shopping malls in Nebraska and South Dakota, was removed because of a “potential dispute” between the borrower and a lender, according to a filing today with the U.S. Securities and Exchange Commission.
However, this was not the only red flag.
In a supplement distributed to bond buyers prior to the pricing, the underwriters disclosed additional information about a $3.8 million loan linked to manufactured housing in Virginia, noting that the loan documents were being modified because the borrower failed to disclose a guilty plea in 1989 arising from “incorrect statements” submitted to lenders.
