For someone who doesn't live in this world but loves this stuff::: Difference between a CMBS and commercial?
CMBS: Incorporated domestically? More commonly first mortgage loans and only mortgage debt is allowed here--no derivatives. Investment grade but can be below investment grade. More transparent. Collateral cannot cycle in and out.
CDO: Incorp0orated offshore? More commonly floating rate loans and can be backed by an array of commercial real estate collateral--CMBS, preferred equity and construction loans within the CDO. Exotic debt and unsecured loans are commonly found here (along with some secured debt too). Short term and long term derivatives mixed in. Riskier debt--usually below investment grade and almost never an interest only tranche. Collateral can cycle in and out here.
Who are the common purchasers for each type? I assume there is some crossover.
We're seeing spreads 140+swaps from CMBS (in my market) --- anyone else seeing these high spreads?