Harvey CMBS exposure estimates reach USD 19.4bn; secondary spreads hold steady; primary market explodes — CMBS Monthly Report

05 September 2017

Hurricane Harvey’s path of destruction across Texas and Louisiana dominated investors’ attention as August closed out. Morningstar estimates that CMBS loan exposure is USD 19.4bn, comprising 1,529 commercial properties backing 1,277 CMBS loans. Meanwhile, special servicers and borrowers continued to work out legacy loans in August.


Post-crisis BBB- and A rated CMBS ratcheted in to touch new lows for the year in August while AAAs and AAs held steady. BWIC volume fell to USD 958m (original) from USD 1.02bn in July, reflecting the traditionally lighter trading volumes of late August.


But primary market activity was surprisingly strong in August. Issuers priced USD 10.955bn in CMBS, making August the most active month for new CMBS issuance this year. Issuers priced USD 7.6bn in July, USD 10.4bn in June and USD 8.3bn in CMBS in May. The supply pushed year-to-date CMBS volume to USD 52.34bn. At this point last year, primary CMBS issuance was just USD 36.1bn.


Read about distressed CRE loans and CMBS as well as the secondary and primary markets — and view data on distressed loans, secondary market activity, new issue pricings and our market coverage — in the Debtwire ABS US CMBS Monthly Report for August.