CMBS

The covid crisis has tempered issuance this year. But lenders are hopeful the market will revive as the US emerges from social restrictions imposed due to the pandemic.

With recovery underway in the US hotel sector, securitisation activity is gradually picking up in select sub-sectors – albeit with more conservative underwriting.

Commercial mortgage-backed securities issuance in Europe is gaining traction, with six deals launched so far this year.

Rating agency Moody’s predicts next year’s European CMBS issuance will have greater exposure to assets including multifamily residential and specialised properties.

In the second of a two-part review of 2020, we examine how real estate lenders continued to do business, and raise fresh capital, amid the uncertainty created by covid-19.

The follow up to KKR’s 2017 fund will continue to focus on junior tranches of commercial mortgages.

The rating agency’s analysis of office-backed CMBS transactions shows AAA- and AA-rated tranches can withstand higher vacancy rates, while lower-rated tranches are more vulnerable.

Retail icons are being toppled, spelling major trouble for US shopping malls as a cascade of defaults looms.

Distressed hotel deals are now visible, but access to many would-be discounted transactions in the sector looks restricted.

Ratings agency S&P expects the delinquency rate to climb higher for June, although European CMBS are so far weathering the storm.