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KBRA Releases Monthly CMBS Trend Watch

April 5, 2019

NEW YORK--(BUSINESS WIRE)--Apr 5, 2019--Kroll Bond Rating Agency (KBRA) releases March’s CMBS Trend Watch.

CMBS private label pricing volume increased in March to $7.0 billion from $6.6 billion in February. However, the year-to-date issuance of $16.3 billion on a year-over-year basis fell further behind in March, with a 16.0% decrease compared to 8.0% through February. In April, we could see the launch of up to six single-borrower deals as well as three conduits, three commercial real estate collateralized loan obligations (CRE CLOs), and two Freddie K-Series transactions.

In this month’s issue, we introduce two Spotlight sections. The first, KBRA March Investor Dinner Highlights, features a KBRA-hosted investor dinner held on March 28. Investors from across the CMBS/CRE CLO space shared their views on a number of issues through interactive polling. The underlying tone from investors was generally positive, with many attendees indicating they were looking to deploy more capital in this sector relative to last year. However, investors appeared a little more risk adverse compared to 2018, with 62% of attendees signaling plans to move up in credit in 2019.

The second Spotlight section, Upgrade to Downgrade Ratio Compresses, is a review of Q1 2019 rating actions. The CMBS upgrade to downgrade ratio in Q1 2019 compressed quite a bit to 1.15 to 1 versus 4.2 to 1 for full-year 2018. The main drivers of the downgrades include operating performance declines for both retail centers as well as for properties located in oil-related economies.

In March, KBRA published pre-sales for seven deals ($4.3 billion), including three conduits ($2.7 billion), one CRE CLO ($518.3 million), one single borrower ($515.0 million), one single-family rental ($317.1 million), and one small balance commercial ($248.0 million) transaction. We also published presale reports for two European transactions. There were 415 surveillance actions effectuated in March, including 389 affirmations, 11 upgrades, and 15 downgrades.

In addition, the three-month rolling average IO Index continued its upward trajectory for the fifth consecutive month to its highest level on record.

To view the report, click here.

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About KBRA and KBRA Europe

KBRA is a full-service credit rating agency registered with the U.S. Securities and Exchange Commission as an NRSRO. In addition, KBRA is designated as a designated rating organization by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized by the National Association of Insurance Commissioners as a Credit Rating Provider and is a certified Credit Rating Agency (CRA) by the European Securities and Markets Authority (ESMA). Kroll Bond Rating Agency Europe Limited is registered with ESMA as a CRA.

View source version on businesswire.com:https://www.businesswire.com/news/home/20190405005247/en/

CONTACT: Analytical Contacts:

Giselle Vuong, Senior Analyst

(646) 731-2435

gvuong@kbra.com

Larry Kay, Senior Director

(646) 731-2452

lkay@kbra.com

Eric Thompson, Senior Managing Director

(646) 731-2355

ethompson@kbra.com

KEYWORD: UNITED STATES NORTH AMERICA NEW YORK

INDUSTRY KEYWORD: PROFESSIONAL SERVICES BANKING FINANCE

SOURCE: Kroll Bond Rating Agency

Copyright Business Wire 2019.

PUB: 04/05/2019 09:50 AM/DISC: 04/05/2019 09:50 AM

http://www.businesswire.com/news/home/20190405005247/en