NEW YORK--(BUSINESS WIRE)--Kroll Bond Rating Agency (KBRA) releases May’s CMBS Trend Watch.
CMBS private label pricing volume increased in May to $10.9 billion from $3.1 billion in April, bringing the year-to-date issuance total to $30.5 billion. With this jump, May became the first month this year in which volume was up on a year-over-year basis.
The forward pipeline indicates that we could see the launch of five conduits and upward of 10 single-borrower deals in June. While we do not expect near-term issuance of a commercial real estate collateralized loan obligation (CRE CLO), we are currently aware of as many as five deals that could go out through the summer and early fall.
In May, KBRA published pre-sales for nine deals ($6.8 billion), including four conduits ($3.5 billion), four CRE CLO transactions ($2.5 billion), and one single-borrower deal ($0.8 billion). We also published a pre-sale report for one European securitization. The loan is secured by the borrower’s interests in 112 assets, most of which are “last mile” industrial warehouse properties.
May’s surveillance activity includes a review of 449 rated classes, consisting of 438 affirmations, seven upgrades, and four downgrades. The activity was effectuated across 41 transactions, including 24 conduits, seven single borrowers, four Freddie K-Series, one re-remic, two CRE CLOs, two large loans, and one small balance deal.
As part of surveillance activity in May, KBRA highlighted 116 KBRA Loans of Concern (K-LOCs), which consist of specially serviced and real estate owned (REO) assets as well as non-specially serviced loans in default or at heightened risk of default. There were also 17 KBRA Performance Outlook (KPO) changes, including 13 to Underperform from Perform, one to Perform from Underperform, and three to Outperform from Perform.
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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 designated as a designated rating organization by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized by the National Association of Insurance Commissioners as a Credit Rating Provider, and is 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.