Issuance of new securities backed by commercial mortgages fell 4.9 percent from the second to the third quarter of 2018, according to a new Inside MBS & ABS market analysis. [Includes one data chart.]
Although legislative reform of Fannie Mae and Freddie Mac is dead for now, Ginnie Mae supporters continue to worry about what might happen to agency MBS spreads if the government-sponsored enterprises get an explicit guarantee on their MBS.
The bankruptcy filing by Sears will likely place additional stress on commercial MBS backed by the retailer, but the effect in most deals could be minimal and, in the long term, even positive for the commercial properties, said rating agencies.
The new single security is on track for its June 3, 2019, launch and trading is expected to begin around March, according to Fannie Mae and Freddie Mac executives speaking at the Mortgage Bankers Association’s annual conference in Washington last week.
Issuance of single-family rental securities this year is on track to be 60.0 percent higher than issuance in 2017, according to analysts at Bank of America Merrill Lynch. The sector has been helped by ongoing demand for rental properties and strong performance.
Issuance of collateralized debt obligations holding trust preferred securities has resumed in recent years after performance issues related to the financial crisis. Investors report strong demand for TruPS CDOs and suggest that banks should issue more of the deals.
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