NEW YORK--(BUSINESS WIRE)--Kroll Bond Rating Agency (KBRA) releases June’s CMBS Trend Watch.
In June, CMBS private-label pricing volume totaled $11.5 billion, the highest monthly volume the market has seen since February 2015. June’s robust volume brings the year-to-date (YTD) total to $40.3 billion, up 18.4% year-over-year (YoY). Through the first half (1H) of 2018, single borrower and conduit transactions have been equally represented, both accounting for 49% of the total volume, while the other 2% was made up of small balance and large loan transactions.
Based on the forward pipeline, it doesn’t look like the CMBS market will be on summer break for the next few weeks. We are aware of as many as a dozen single-borrowers (SBs), including several single-asset deals, and up to six conduits that are expected to announce through the first full week of August. There isn’t much visibility through the remainder of August – perhaps that’s when we can expect a summer lull. On the CRE CLO front, issuance has remained strong, with 12 deals priced YTD through June and as many as seven that are trying to come to market through August.
New issue conduit spreads for the benchmark LCF AAA class widened out in June, pricing at Swaps (S) + 98 bps on the high end, the widest spread seen on a comparable class since this time last year.
The KLTV, IO, KDSC and KBRA Debt Yield (KDY) all showed some improvement in June. The three-month average KDY rose to a record-high of 10.7%.
On the ratings front, KBRA published pre-sales for nine deals ($6.5 billion), including three CRE CLOs ($1.3 billion), one conduit ($803.8 million), one Freddie K-Series ($1.1 billion), two single borrowers ($1.8 billion) and two single family rental ($1.5 billion) securitizations. Surveillance activity included a review of 304 rated classes, including 284 that were affirmed, 18 that were upgraded and two that were downgraded.
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KBRA is a full service credit rating agency registered with the U.S. Securities and Exchange Commission as an NRSRO. In addition, KBRA is recognized by the National Association of Insurance Commissioners as a Credit Rating Provider and a certified Credit Rating Agency (CRA) by the European Securities and Markets Authority (ESMA). Kroll Bond Rating Agency Europe Limited is registered with ESMA as a CRA.
