KBRA releases research on upcoming maturing conduit loans. With the Federal Reserve raising interest rates for the first time in three years and indicating that six more rate hikes are coming this year, KBRA wanted to better understand the refinancing prospects of conduit loans that are maturing through 2023.

In the base case for our analysis, approximately 60% of these maturing mortgage loans can successfully refinance with a first mortgage without the need for additional financing or equity. In the report, we also construct sensitivities around different capitalization rates and loan-to-value scenarios.

The maturing loan collateral totals $55.6 billion (2,426 loans), of which retail (38.8%) and office (25.3%) have the largest exposure. In the base case, retail achieved a refinance rate of 51.7% versus office, at 66.7%. The most challenged property type is lodging (13.5% of maturing population) at a refinance rate of 21.7%, which reflects the pandemic’s impact on lodging performance. The report also provides base case refinance rates for six other property types as well as various refinance scenarios for the five major property types.

Click here to view the report.

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About KBRA

KBRA is a full-service credit rating agency registered in the U.S., the EU, and the UK, and is designated to provide structured finance ratings in Canada. KBRA’s ratings can be used by investors for regulatory capital purposes in multiple jurisdictions.

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