The Planets Have Aligned for CMBS Borrowers
A strong supply of new CMBS issuance this month increases the likelihood of hitting the $100B mark for 2014. (That's over a $190k/min.) It's just one of the many reasons we're excited to be holding our San Francisco Capital Markets Summit on Sept. 16 at Hotel Nikko.
Jefferies LoanCore managing director Jean Baker, who's speaking at the event, reveals a few recent debt market trends driving that number. After 10-year super-senior AAA-rated CMBS spreads declined to a low of 71 bps in June, the market widened as a result of significant increased CMBS issuance later in the summer. By mid-August, the super-senior AAA spread had widened to 90 bps. Spreads have come back a bit, she says, with a new deal launching this month with price talk at 84 bps.
Strong demand from CMBS lenders coupled with the lighter-than-expected demand for CMBS loans has led to tightening spreads and aggressive underwriting practices, including the increase in the frequency and length of interest only periods. Life company and bank competition remains strong, she says, putting further pressure on CMBS lenders to quote aggressively on price and structure. To hear even more, register for our event today.