Commercial Real Estate Weekly reported that RBS is getting closer to bringing a genuine CMBS conduit transaction to market, the first in more than a year. The buzz is that the investment bank could launch a deal with some $500 million of recently originated fixed-rate mortgages, some contributed by Natixis, within a month or so. And it’s not expected to rely on the federal government’s Term Asset-Backed Securities Loan Facility, or TALF, program. With CMBS spreads tightening — super-senior AAA spreads for generic bonds have fallen by more than half since June 2009 to roughly 435 basis points over swaps — the market is becoming more hospitable for lenders to write loans for securitization. But the market remains quite volatile, and some lenders might view the rewards of originating loans for securitization as not worth the risks involved in the endeavor. Complicating things further is that demand from borrowers for low-leverage loans isn’t keen. Nonetheless, a number of lenders are said to be writing loans with the intent of securitizing them. “We are getting closer to a real CMBS issue that will be the turning point in the CMBS market,” said Jim Brett, who analyzes CMBS issues for ValueXpress’s CMBS investment program. “The first issue will be a blowout. Mark my words.”
