CMBS Spreads at 2-Year High

CMBS traders and investors said it’s too soon to say whether spreads have stabilized. Spreads widened in recent weeks amid a spate of issuance, and there’s some sentiment that levels will reverse course. But the answer will not come for a while, because there are no other transactions planned until after Labor Day. One looming wild card is whether the Federal Reserve confirms expectations that it will raise short-term interest rates as its next policy meeting in mid-September and how that decision affects spreads.

Meanwhile, secondary-market trading, which was already slow this year, came to a virtual standstill this week as the usual late-summer doldrums hit.

(via CMA)