CMBS B-Piece Buyer Dry Powder?

Lizard Brain's picture
Rank: Neanderthal | 3,232

As you might have deduced from the post title, would any of you care to share how YOU would go about coming up with an educated guess for the amount of dry capital that is waiting around to purchase conduit CMBS BB-NR paper? Not necessarily risk-retention capable, just any b-piece. Alternatively, if you know the actual number, that would be awesome, or if you want to take a wild-ass guess, that would be cool too.

I'm thinking there has to be at least a year's worth of capacity(?), so if 2017 projected conduit volume is something like $50-$55BN, and let's say the average BBB- credit enhancement is 7.5%, that would be something like $3.9BN in dry powder. What do you guys think?

Comments (4)

Feb 22, 2017

I mean, some of these funds pursue additional debt opportunities beyond B pieces. Also, there is definitely much more allocation for B pieces than there are actual B pieces to go around.

Also, it's interesting that you have loan contributors taking down the B piece (beyond Rialto and LNR, you have Basis/Silverpeak)

Feb 22, 2017

Well, there's also one OBVIOUS thing wrong with your number of $3.9Bn. Let me know if you don't figure it out.

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Feb 22, 2017

Wow that just hit me in the face. Thank you. Discount to par

Feb 22, 2017
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