is CMBS back?
seeing some originators sending emails out saying they are quoting deals again . has anyone gotten a CMBS term sheet or have any idea where the pricing actually is ?
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Interested as well to see where players are at with pricing
WFCM 2020-C56 and BMARK 2020-IG3 getting done was good news. However, pricing is still wide. I stopped working on cmbs loans in March, our breakeven was 200-220 lbs then, I would imagine now it would be at 260-280 bps if we were still looking at deals. While originators might be sending out quotes, I would rather pay more attention to certainty of execution, there will definitely be pricing adjustments before any loan closes.
sorry, prospect here. what do you mean when you say pricing is still wide?
Interest rate will be higher. For example, if our breakeven was 220 bps in February, borrowers interest rate could be UST+240 bps. Now, when our breakevens are 280 bps, the borrowers rate will be UST+ 300 bps. There will be a floor as well given the volatility with treasuries. So CMBS may not be competitive right now against other financing sources like life cos, banks.
Agreed. Definitely not back. Those deals getting done were mostly loaded with stale loans... I'm not aware of many guys closing today... hear of soft quotes... but that's just BS. I know of a couple closings within the past month or so at 10yT+350/375+ (actually closed). Although there are a couple new deals set for later this summer, id still guess filled with a good amount of stale loans from ~Q1.
I've heard Eastdil reported some SASB deals getting done in last few weeks. Corp bonds have done really well and are absolutely 'back' so CMBS should be close, just maybe tough for certain assets (like anything retail).
interested
Research reports are coming in tighter by approximately 300 bps on the BBB- levels, still not anywhere near Feb 2020 spreads, but outlook seems positive, except for anything retail. Hotel SASB Investment tranches also seemed to recover this month, although who would get on flights to get there is a wonder to me !!
Heard the wave of conduit were written before May and to expect a lull after this uptick until September.
Originators are usually full of shit...
tell me about it ....I feel for them tho cause they’re fighting for their jobs if they haven’t lost them already
A lot of redundancies in that world. Talented ones are invaluable but there are a lot of jokers
I just heard from a few CMBS guys that it is starting to make a comeback with buyside demand (and demand for bonds in general) coming back which is causing spreads to fall considerably the past week.
All the deals in the market have that priced/settled have stale/pre-covid collateral. Really curious what loan structure post-covid loans have. Heard of some of the bigger shops close CMBS loans but unsure what kind of execution (SASB, conduit), who the sponsors are and what leverage point, market, etc.
New deal just had b piece placed. Coming to market shortly. Lots of pieces of trophy office where the majority of the debt is being placed in the SASB. Some grocery anchored retail/standalone big box with corporate guarantee but coverage was north of 2.25x. No hotel, not surprising. Lots of Self Strorage, over half the pool by loan count.
You mean the BBCMS deal, yep. Having pari notes of trophy asset SASB deals is super common for top 10 deals -everyone does it. Look at the 'IG' shelves, those pools are small but nothing but low leverage pari notes.
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