Market Finding Equilibrium
After several weeks of volatility, it appears as if the market has leveled out. The 10-year Treasury, which peaked at 2.7% two weeks ago, has settled in the 2.49-2.55% range.
After being beat on rates by CMBS shops earlier this year, insurance companies missed projected goals and are increasingly anxious to lend the resulting surplus. The tables have turned, and insurance lenders’ rates are now more attractive, falling in the 4.0-5.50% range for 10-year terms. These shops tend to be more aggressive on low to moderate leveraged loans in core locations.
The CMBS market has also managed to find its sea legs. According to Commercial Mortgage Alert, “Commercial MBS prices have bounced off their recent lows, providing hope to securitization programs that the worst of the market rout is over”.