CREFC Capital Markets Update Week of 3/13

March 13, 2023

Muted Issuance Continues

Private-Label CMBS and CRE CLOs. Issuance remained sluggish last week, with only one private-label transaction pricing, a $350 million SASB (GSMS 2023-FUN). This is only the third CMBS pricing over the previous three weeks; the others being SASB transactions: LAQ 2023-LAQ on March 3 ($625 million) and SCOTT 2023-SFS on February 24 ($500 million).

  • Year-to-date private-label CMBS and CRE CLO issuance stood at $6.2 billion, well behind last year’s tally at this time of $43.8 billion. Several conduit offerings were expected to hit the market in the coming weeks. However, these deals may be pushed back given the recent market anxiety over the Fed’s next rate hike and spread widening resulting from continued bad news in the office space.
  • The 10-year Treasury yield hit 3.99% last week before plunging on Friday to end the week at 3.70%, down 25 bps from the prior week – the largest weekly decline since November. The drop was driven by investors rushing to safety on growing contagion fears following the collapse of California’s Silicon Valley Bank, the largest bank failure in the US since the financial crisis. CME 1M Term SOFR was up 15 bps to end the week at 4.86%, the year’s highest level thus far.
  • Benchmark conduit spreads were sharply at lower levels due to investor anxiety about the office sector and overall weakness in the broader markets. LCF AAA conduit bond spreads ended the week up 3 bps to 122, with AA spreads unchanged at 210 and A spreads up 10 bps to 340. BBB- spreads, however, widened 150 bps to 875.
  •  Agency CMBS. Agency issuance totaled $1.4 billion, consisting of $770 million of Fannie DUS and $640 million of Freddie Multi PCs. Agency issuance for 2023 now stands at $18.2 billion, 57% lower than the $41.9 billion for the same period last year.


Raj Aidasani
Senior Director, Research

The information provided herein is general in nature and for educational purposes only. CRE Finance Council makes no representations as to the accuracy, completeness, timeliness, validity, usefulness, or suitability of the information provided. The information should not be relied upon or interpreted as legal, financial, tax, accounting, investment, commercial or other advice, and CRE Finance Council disclaims all liability for any such reliance. © 2023 CRE Finance Council. All rights reserved.

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