Amid prevailing economic and political uncertainty, U.S. CMBS private label issuance exhibited continued strength. Through March, year-over-year (YoY) issuance doubled (increasing 107.7%) to $37.1 billion. Commercial real estate (CRE) collateralized loan obligation (CLO) issuance was 4.4x higher YoY at $8.4 billion, almost reaching the full-year 2024 volume of $8.7 billion. Spreads have been widening recently, but based on our current visibility, April could see up to 16 rated deals including eight single borrower (SB), five conduits, and three CRE CLOs. However, we are observing increased gestation periods for some conduits before they come to market—time will tell whether that is a blip or an early sign of creeping uncertainty.
The March conduit benchmark last cash flow (LCF) AAA class was at an average of swaps (S) +97 basis points (bps) based on the five conduit deals that were priced between S +92 bps and S +100 bps. The conduit that priced at +100 bps was a 10-year deal, and the…