By all accounts, the deluge of CMBS supply in July was a force to be reckoned with - or at least bad enough to hurt spread levels, sources say. But as many an analyst noted last week, the resiliency of the sector to fight off the concession is something to behold, and only reemphasizes the love affair with the product sector going forward.

July totals were near $7 billion and the final week of the month brought $3.4 billion (the week of June 15 saw $3.5 billion), making it the second largest weekly issuance of the year, according to Bank of America. Over the month, spreads for the 10-year triple-A classes widened two to three basis points, with the peak at +49 basis points coinciding with the Salomon Smith Barney conduit - SBM7 2001-C1- that priced on July 25. Since, spreads have come in to +46 bps, marking the GE Capital issue that printed on July 30. Both credit subordination and low loan-to-value ratios had something to do with the rather range-bound spread movement, but it was good old-fashioned demand that takes credit for most of the return to the tights.

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