Wednesday, October 7, 2009
This is a Bloomberg summary page of conditions in the Commercial Mortgage-backed Securities market. Note the chart in the upper left hand corner which shows a history of spreads on various types of CMBS. All spreads have been declining since last April, even as news stories of commercial real estate calamities proliferate. In the bottom right chart, note the increased issuance of CMBS this this year, versus last year—this market is coming back to life, despite all the horror stories you are hearing. The bad news is summarized in the bottom left chart, which shows huge increases in downgrades of CMBS this year. The bad news is all over the place, and unlikely to get much worse; otherwise spreads would not be contracting. And while you can bet that rating agencies are doing their utmost to downgrade things, upgrades are still higher this year than they were last year.
Posted by Scott Grannis at 11:25 AM