Experts dig into 2021 CRE loan securitization data to analyze market evolution and examine what may happen in 2022.
Our CMBS experts discuss how recent Fed Rate hikes have curtailed lending liquidity, increasing expectations for more loan maturity defaults. The resulting lending pause also causes them to adjust their 2022 CMBS and CRE CLO issuance forecast downwards.
In this article, Moody’s Analytics analysts review how higher interest rates have increased the 2nd quarter CMBS new issuance minimum debt yield to 7.12%. In contrast, 29% of ~$77.8 billion of COVID-19 affected loans have a debt yield less than 6%. This piece focuses the analysis on CMBS loans that mature before year end and creates an estimate that $7.7 billion in CMBS loans may fail to mature. If these loans are extended, the existing coupon is significantly lower than the ~6% market coupon required on a new loan, so the related CMBS bond extensions will decrease investors’ returns.