NEW YORK--(BUSINESS WIRE)--Kroll Bond Rating Agency (KBRA) released today its CMBS monthly newsletter, CMBS Trend Watch. In this month’s edition of Trend Watch, we note the continuing decline in issuance volume. In April, $2.1 billion of private label issuance priced, bringing the year-to-date total to $19.3 billion, which is down 45% year-over-year.
Ratings surveillance has remained active with 16 transactions reviewed this month, which resulted in 183 ratings actions, including 180 affirmations and three upgrades. The upgrades occurred on two deals CGCMT 2013-GCJ11 (Class B) and RRF 2014-1 (Classes B and C).
Notable changes in KBRA rated credit metrics include a decline in the three-month rolling average KLTV to 100.1%, the lowest it has been since February 2014. However, the KLTV figure was skewed by the presence of several large low-leveraged loans in the deals that were rated this month. On other fronts, the KBRA IO Index reached a peak of 45.2%.
In addition to trends and credit metrics, we’ve provided brief commentary on the year-to-date impact of Regulation AB II on smaller loan originators. Running up to the implementation, there was market chatter that some of the smaller loan originators may be driven out of the market; however, it appears that while the number of originators declined since 4Q 2015, it remained relatively consistent on a year-over-year basis. We highlight that the proportion of year-to-date origination volume by smaller entities actually increased by 5%.
In the Publications Corner section, we highlight two research pieces released this month: Not All Loans Make the Final Cut and CREFC: Wall of Maturities, Risk Retention, Market Volatility: The Perfect Storm.
In our commitment to transparency, we updated our comprehensive set of the statistics for our rated conduits along with this issue of Trend Watch within the KBRA Comparative Analytic Tool (KCAT). The file enables users to compare data points from all KBRA rated conduits.
To view the report, please click here.
About Kroll Bond Rating Agency
KBRA is registered with the U.S. Securities and Exchange Commission as a Nationally Recognized Statistical Rating Organization (NRSRO). In addition, KBRA is recognized by the National Association of Insurance Commissioners (NAIC) as a Credit Rating Provider (CRP).