Daily market intelligence on mortgages, equity raising, investment sales, and CMBS.

Monday, 23 March 2020

Market Turmoil Prompts Issuers to Yank Proposed CMBS Deals from Market

At least two CMBS transactions, each backed by loans against hotel properties, have been pulled from the market, thanks to the beating that property sector has taken over the past few weeks. Meanwhile, hotel loan delinquency rates are expected to increase.

Commercial Real Estate Direct Staff Report

Hotel and retail properties have been walloped by the actions taken to stem the coronavirus pandemic.

Occupancy rates at hotels have plummeted and mall operators have started shutting their properties en masse.

But hotels, given their transient leasing, have been especially hard hit. And their plunging operating fundamentals have prompted at least two CMBS deals that were in the near-term issuance pipeline to get pulled, at least for the time being.

Contributing to that issuance pullback are plunging CMBS prices. Benchmark bond classes for conduit transactions on the secondary market last week blew out to a median 277.5 basis points more than swaps. That compares with a median spread of 155 bps more than swaps a week earlier. Spreads were as low as 79 bps more than swaps just six weeks earlier, according to the Commercial Real Estate Direct CMBS Pricing Matrix.

And bonds rated BBB- have been hammered even harder. Their spreads have blown out to a median of 855 bps more than swaps. That's the widest they've been since the Great Financial Crisis, when they had ballooned to as much as 10,000 bps more than swaps.

With spreads that wide, it's no surprise that issuance has ground to a halt.

Citigroup had been planning BX Commercial Mortgage Trust, 2020-VIVA, which would have allowed it to securitize a $562.4 million piece of a $3 billion loan that it, along with Barclays Bank, Deutsche Bank and Societe Generale, had provided for the recapitalization of the MGM Grand and Mandalay Bay resorts in Las Vegas. The recap involved Blackstone Real Estate Income Trust Inc. buying a 49.9 percent...


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Data Digest







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




cppichart FP



CMBS 2.0 Spreads


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





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