Life Cos.' Mortgage Returns Rebound

BOSTON—Returns on commercial mortgage loans held by life insurance companies made a strong recovery in the third quarter of 2015, LifeComps said Friday. The LifeComps Commercial Mortgage Loan Index posted a 1.62% total return in Q3, rebounding from Q2′s negative 1.23% performance. The LifeComps index currently encompasses 4,500 loans with an aggregate principal balance of $103.7 billion.

Income return across the index was 1.21%, while price added 0.41% during Q3.  LifeComps says the value increase resulted from lower yields on Treasuries with terms over two years, which more than compensated for the negative effect of wider mortgage spreads. The yield on the 10-year Treasury declined 29 basis points during the quarter.