CRE CLO Issuance “Very Active” in January: KBRA 

Following a strong 2024 issuance year, January continued to show strength, with year-over-year (YoY) private label CMBS issuance rising by 38.1%, according to the latest KBRA CMBS Trend Watch report. 

This growth occurred despite an increase in the benchmark rate, while credit spreads remained stable compared to year-end. Additionally, commercial real estate collateralized loan obligations (CRE CLO) issuance was very active in January, already reaching about half of the projected full-year 2024 volume, according to highlights of the report. 

Despite the possible turbulence that the current administration’s policy moves may bring, February is likely to exhibit healthy gains, according to KBRA’s current outlook. There could be up to 21 rated deals this month, including nine single borrower (SB) deals, seven conduits, three CRE CLOs, and two Freddie Mac (Agency) transactions. 

In January, KBRA published pre-sales for six deals, including two conduits ($1.8 billion), two single borrower (SB) deals ($1.7 billion), one re-remic ($3.5 billion), and one CRE CLO ($984 million).  

The month’s surveillance activity also included rating reviews of 420 securities issued in connection with 50 transactions. Of the 420 ratings, 340 were affirmed, 56 were downgraded, and 24 were upgraded. In addition, eight ratings were maintained on Watch Developing based on one deal.