11.25.14: Spreads Widen on Recent CMBS Offering

On November 23, UBS, Deutsche Bank, Jeffries, Cantor Fitzgerald, KeyBank and Pillar priced the benchmark class of a $1.275-billion multi-borrower CMBS conduit offering at significantly wider spreads than the previous offering on November 18 from Wells Fargo, RBS, Rialto Capital and other loan contributors. The benchmark AAA-rated super-senior class priced at 92 basis points (bp) over swaps, up 3 bp from price guidance and 7 bp wider than the spread on the long-term, super senior class of the Wells Fargo/RBS deal that priced at 85 bp over swaps. Prior to the UBS/Deutsche Bank deal, new issue super-senior spreads were in the area of 85-86 bp over swaps.

The other investment-grade classes in the UBS/Deutsche priced even wider. The junior AAA-rated class priced at 132 bp over swaps, up 7 bp from price guidance and 12 bp wider than the spread on the junior AAA-rated class of the Wells Fargo/RBS deal. The AA-rated class B priced at 162 bp over swaps, also up 7 bp from price guidance and 17 bp higher than the equivalent class in the Wells Fargo/RBS deal.

Dealers were unsure about which event or combination of events may have contributed to the wider pricing. First, talk was that many trading desks were thin during Thanksgiving week. In addition, the UBS/Deutsche team deals tend to price wider of other conduit deals. Last, there was some concern about collateral, including the third-largest loan consisting of an older portfolio of less-than-fully occupied mobile home parks and self-storage facilities.

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This entry was posted in CMBS, CMBS Conduit Loans, CMBS Securities, Commercial Mortgage-Backed Securities, Michael D. Sneden, News & Recent Closings, The Banker's Mortgage Conduit, Valuexpress and tagged , , . Bookmark the permalink.

One Response to 11.25.14: Spreads Widen on Recent CMBS Offering

  1. Pingback: ‘11.28.14: Flood of CMBS Deals May Put Downward Pressure on Pricing | ValueXpress News

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