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Thursday, 17 January 2019

Kroll Bond Rating Agency: Spiking Interest Rates Could Slow Lending Volumes

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We recently asked each of the CMBS rating agencies to outline what their biggest concerns might be in the event interest rates increase over the coming year. We're publishing their responses, which also appear in our Year-End magazine. For an electronic version of the magazine, please email orest.mandzy@crenews.com.

By Larry Kay

Recent headlines have indicated that the Federal Reserve is weighing a wait-and-see approach to raising rates following an accommodative monetary policy over the last few years.

Despite this, wage pressures have started to appear, which could trigger higher inflation and force the Fed's hand. This, as well as the Fed's quantitative tightening, will eventually lessen demand for commercial real estate assets. When this might occur is an open question, however, as we are in the late stages of the commercial real estate cycle and no one will ring the bell when it ends. In addition, as long as the interest rate movement is gradual and properly guided, investors can position themselves to adapt and adjust their investment posture.

In regard to 10-year, fixed-rate loan...





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“The Weekly”

“The Weekly” is Commercial Real Estate Direct’s PDF newsletter, sent to subscribers every Friday morning. With over 100 news stories published on Commercial Real Estate Direct each week, “The Weekly” features the top stories in commercial real estate that industry participants need to know first. “The Weekly” also contains:

  • Breaking mortgage, CMBS, and REIT news

  • Quarterly league tables with rankings of B-piece buyers, book runners, and lenders

  • Industry moves and changes in “The Insider“

Additional Info

  • Syndicate to Realpoint: No
  • Subject: CMBS - non-deal specific (CMBS-G), Commercial MBS (CMBS), Mortgages/Financing (MOR), Research (RES)
  • Private: Yes
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Data Digest

 

CMBS DELINQUENCY VOLUME

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CMBS SPECIAL SERVICING VOLUME

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Top Bookrunners Domestic, Private-Label CMBS - 2017
Investment Bank #Deals Vol$mln MktShr%
Goldman Sachs 17.59 11,819.34 13.68
JPMorgan Securities 14.52 10,968.11 12.70
Citigroup 12.04 10,012.71 11.59
Wells Fargo Securities 14.02 9,936.06 11.50
Deutsche Bank 12.55 9,879.74 11.44

 

RCA CPPI

 

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CMBS 2.0 Spreads

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Top CMBS Loan Contributors - 2017
Lender #Loans Vol$mln MktShr%
Goldman Sachs 146.89 11,719.34 13.63
JPMorgan Chase Bank 117.68 10,114.14 11.76
Deutsche Bank 198.48 9,689.97 11.27
Morgan Stanley 166.18 8,539.78 9.93
Citigroup 199.05 8,088.24 9.41

 

 

 

REITCafe

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shouldn’t be a surprise as it comes while the yield from 10-year Treasury bonds, the benchmark against which most REIT’s price their bonds
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