As the CRE Finance Council’s annual conference kicked off in New York City today, Kroll Bond Rating Agency sent a newsletter to industry insiders reinforcing the belief that 2015 could prove record-setting for post-recession US CMBS issuance.
Year-to-date US CMBS issuance through May reached $45bn, approximately 27% higher than the same period in 2014, according to KBRA. May issuance totaled $8.6bn in May, up from $6.8bn in April.
Even before the year started many industry insiders were predicting that 2015 would bring CMBS issuance volumes well into the triple digits. The pace set so far would bring yearly issuance to $108bn, but KBRA noted in a newsletter this morning that issuance is likely to pick up through the summer months.
“We’re expecting heavy volume as we settle into the summer. We’ve been engaged to rate a number of transactions in June, including six conduits, and we are analyzing another six on a preliminary basis,” the rating agency said.
“With the market preparing for higher interest rates, and the ten-year treasury at 2.40% as we go to press, borrowers that have been on the sidelines may decide to lock-in rates and fuel increased lending activity.”
KBRA rated the three conduits announced in May, but assigned ratings to loan specific rake certificates only on one of them. The agency also rated two single-family rental deals, one re-securitization, and a single-borrower transaction, assigning 67 ratings in total during the month.