Fixed rate U.S. conduit issuance in CMBS finished up at $12.62 billion on four deals for the month of October. The deals varied in size from $1.5 to $4.2 billion, with triple-A super senior spreads trading in a range of 21 to 23 basis points over swaps, with the last deal settling in the middle at 22 basis points over. For the month of October, spreads were generally wider in the short to intermediate triple-As and tighter in super seniors and on down the curve to triple-B minus. Perceived lowering of underwriting standards has some in the CMBS community shying away from shorter and intermediate triple-As in favor of longer locked outs as the due diligence necessary to properly analyze the shorter ones has some bypassing this suddenly cheaper sector.
The floating rate sector had four deals totaling $8.52 billion for the month, as new issuance resumed after a light September. In credit default markets, the CMBX's most recent index was launched on Oct. 25. CMBX.2 was rolled out featuring a double-B sub index where none had been offered in the initial index of six months prior (CMBX.1). The double-Bs immediately tightened 16 basis points before the month closed out as strong demand met expectations for the sub IG class.