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Monday, 02 July 2018

CMBS Issuers Ring Bells in June; 1H Volume Climbs 18.5 Percent

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Commercial Real Estate Direct Staff Report

CMBS issuance during the second quarter totaled $21 billion, bringing volume for the first half of the year to $40.4 billion, or 18.5 percent greater than during the same period last year.

Thanks to a flurry of deals last week - six deals totaling $5.1 billion priced - June accounted for more than half the quarter's issuance. A total of 17 deals priced with a combined balance of $11.4 billion during the month. That likely contributed to some of the spread widening. The four conduit deals that priced last week saw their benchmark bonds, those with the highest ratings and 10-year average lives, price at spreads that were at least 4 basis points wider than a conduit that priced a month earlier.

Domestic, Private-Label CMBS Issuance

1H2018

1H2017

Deal Type

#Deals

Vol $mln

#Deals

Vol $mln

% Change

Conduit

21

19,693.23

22

20,662.06

(4.69)

Single-borrower

42

20,534.91

22

12,119.35

64.91

Other

1

164.96

3

1,309.64

(87.40)

TOTAL

64

40,393.10

47

34,091.05

18.5

Despite the prospects of higher interest rates, borrower demand for securitized mortgages remains relatively healthy. The Mortgage Bankers Association reported that the first quarter enjoyed the largest quarterly growth in the commercial mortgage universe since the Great Financial Crisis. That demand, by most accounts, hasn't softened.

Meanwhile, property sales activity, at least in the first quarter, started rebounding. Sales transactions typically are drivers for lending activity. CMBS lenders might be starting to push their underwriting practices in order to win loans. While underwritten leverage and coverage ratios haven't changed much this year through June, rating agencies have warned about the growing volumes of loans that don't amortize for at least a part of their terms.

Deutsche Bank was the most-active bookrunner during the latest three-month period, receiving credit for 5.9 deals totaling $3.6 billion. But that wasn't enough to unseat JPMorgan Securities, which remains atop a ranking of bookrunners for the half. It so far has accumulated credit for 11.4 deals totaling $6.9 billion. Deutsche's first-half bookrunner volume totals $6.3 billion.

The two investment banks accounted for one-third of all private-label CMBS issuance during the half.

Well behind them were Goldman Sachs, with $3.8 billion of issuance and Wells Fargo Securities, with $3.7 billion.

Top Bookrunners
Private-Label CMBS

1H2018

1H2017

Investment Bank

#Deals

Bal $mln

Mkt
Shr%

#Deals

Bal $mln

Mkt
Shr%

JPMorgan Securities

11.44

6,930.04

17.16

4.90

3,758.29

11.04

Deutsche Bank

8.41

6,334.12

15.68

5.12

4,289.76

12.60

Goldman Sachs

6.18

3,805.18

9.42

7.45

5,596.07

16.44

Wells Fargo Securities

6.44

3,744.72

9.27

5.43

4,596.11

13.50

Citigroup

5.52

3,643.38

9.10

4.70

3,909.87

11.49

Morgan Stanley

4.10

3,391.89

8.40

4.42

3,533.37

10.38

UBS

3.72

2,598.09

6.43

1.45

1,037.33

3.05

Natixis

8.47

2,320.78

5.75

2.04

728.22

2.14

Barclays Capital

2.78

2,302.50

5.70

2.31

1,898.90

5.58

BofA Merrill Lynch

2.82

2,149.27

5.32

3.71

2,084.60

6.12

Credit Suisse

1.53

1,523.55

3.77

4.26

1,854.94

5.45

Societe Generale

1.05

994.94

2.46

0.46

304.33

0.75

Cantor Fitzgerald

1.56

654.66

1.62

0.85

549.25

1.61

TOTALS

64

40,393.10

 

47

34,091.05

 

Comments? E-mail Orest Mandzy, or call him at (267) 327-4281.

 



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“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:

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  • Subject: CMBS - non-deal specific (CMBS-G), Commercial MBS (CMBS), Research (RES)
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Read 396 times Last modified on Friday, 27 July 2018
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