KBRA releases the December 2022 issue of CMBS Trend Watch.

U.S. CMBS private label issuance began to slow in second-quarter 2022 following a strong start to the year, owing to higher interest rates and uncertainty regarding future Federal Reserve actions. When the dust settled on full-year (FY) 2022, private label issuance totaled $70.2 billion, down 36.5% year-over-year. Based on current visibility, there could be up to seven deals that launch in January 2023, including as many as three conduits, two single-borrower (SB) transactions, one commercial real estate collateralized loan obligation (CRE CLO) transaction, and one Freddie Mac K-Series.

December’s surveillance activity included rating actions on 529 classes consisting of 499 affirmations, 22 downgrades, two upgrades, and six Watch Developing placements. The activity was effectuated across 45 transactions including 32 conduits, 10 SB transactions, two CRE CLO transactions, and one large loan (LL) transaction. In December, one KBRA-rated CRE CLO transaction that was launched in November was closed.

The Spotlight section reviews the rating transitions that occurred in 2022. CMBS ratings were largely stable in 2022 as 96% of the outstanding conduit, LL, and SB ratings were affirmed over the year. The majority of rating changes were downgrades (204), which came in well under the 371 and 292 from the prior two years, respectively. There were 10 upgrades, which is relatively in line with 2021 (11) and 2020 (eight).

Click here to view the report.

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• CRE CLO Cash Balances Trend Upward as Market Slows

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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