KBRA Releases Monthly CMBS Trend Watch

NEW YORK--()--Kroll Bond Rating Agency (KBRA) releases April’s CMBS Trend Watch. The coronavirus (COVID-19) continues to have a significant effect on the capital markets, including commercial real estate (CRE) securitizations, where private label volume has been suppressed across all transaction types. In fact, the GSMS 2020-GC47 transaction broke a two-month dry spell for conduit issuance this week as the last conduit launch occurred on March 3.

Private label pricing volume ended April at $271.1 million, bringing the year-to-date (YTD) issuance total to $21.8 billion. The sole deal to launch was CF 2020-P1, a large loan transaction. YTD volume is still up 11.4% year-over-year (YoY), but down from last month’s 30% YoY level.

Private label deals that were scheduled for March and April could announce in the coming weeks, with reconstituted collateral pools intended to reduce lodging and retail exposure. While visibility is limited, KBRA could see the launch of up to four conduits, one to three single-borrower deals, one large loan transaction, two single-family rentals, and one small balance deal in May and June. In addition, Freddie Mac, which has brought three K-Series deals to the market which priced in April, has four additional transactions scheduled through June.

This month’s Spotlight section highlights 10 recently published KBRA reports, of which six focus on U.S. CRE securitizations while the other four discuss rent disruptions, retail, and coworking in Europe. KBRA also sponsored a webinar on the COVID-19 Impact: A Focus On Commercial Real Estate and CMBS in which we provided our views on the potential credit impact related to the pandemic

In April, KBRA published pre-sales for two deals ($1.5 billion), including one large loan ($271.1 million), and one Freddie Mac transaction ($1.3 billion). April’s surveillance activity included rating actions on 330 classes consisting of 317 affirmations and 13 downgrades. KBRA highlighted 158 KBRA Loans of Concern (K-LOCs), as well as 53 KPO changes. KBRA also placed two single-borrower and two large loan deals (collateralized by lodging or retail loans) on Watch Downgrade reflecting their recent respective loan transfers to special servicing due to imminent monetary default.

Click here to view the report.

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About KBRA and KBRA Europe

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) with the European Securities and Markets Authority (ESMA). Kroll Bond Rating Agency Europe Limited is registered with ESMA as a CRA. Kroll Bond Rating Agency Europe Limited is located at 6-8 College Green, Dublin 2, Ireland.

Contacts

Analytical

Giselle Vuong, Senior Analyst
+1 (646) 731-2435
gvuong@kbra.com

Larry Kay, Senior Director
+1 (646) 731-2452
lkay@kbra.com

Eric Thompson, Senior Managing Director
+1 (646) 731-2355
ethompson@kbra.com

Business Development

Michele Patterson, Managing Director
+1 (646) 731-2397
mpatterson@kbra.com

Contacts

Analytical

Giselle Vuong, Senior Analyst
+1 (646) 731-2435
gvuong@kbra.com

Larry Kay, Senior Director
+1 (646) 731-2452
lkay@kbra.com

Eric Thompson, Senior Managing Director
+1 (646) 731-2355
ethompson@kbra.com

Business Development

Michele Patterson, Managing Director
+1 (646) 731-2397
mpatterson@kbra.com