Kroll Bond Rating Agency (KBRA) released this month’s CMBS Trend Watch. In the August edition, we note that $4.2 billion of private-label issuance priced, bringing the year-to-date total to $37.3 billion, down 45% year over year. We expect September to be a busy month in terms of deal issuance, as we are aware of seven conduits and a number of single-asset single-borrower (SASB) transactions that are slated to launch by month’s end.
At the beginning of this month, WFCM 2016-BNK1 received very positive market feedback, pricing at Swaps (S)+94 basis points (bp) for its last cash flow AAAs. Since then, conduit spreads seem to have settled around S+105 bp for last cash flow AAAs and +500 bp for BBB-. Comparable spreads for the AAAs have not been seen since July 2015, but while BBB- spreads have greatly improved from earlier this year, they remain wide compared with the year-earlier period.
On the ratings front, KBRA published presales for four deals ($2.6 billion), including the aforementioned BNK1 deal. Surveillance activity consisted of 22 transaction reviews that resulted in 218 ratings actions, including 7 upgrades and 2 downgrades.