Standard & Poor’s said today that Raith Capital is set to become a more active buyer of B-piece paper in CMBS deals.
The investor in the most subordinate CMBS bond classes is commonly referred to as the “B-Piece Buyer”. B-Piece buyers generally purchase the B-rated and BB-rated bonds classes along with the unrated classes.
The addition of a new active player will add to an active market that is currently dominated by six buyers.
Raith Capital was launched in February 2012 by three former Rialto Capital employees; William Landis III, Nelson Hioe and Michael Suchy. The company did not return a call to comment on this story.
S&P calculated that, year-to-date, six buyers have purchased about $1.6 billion in par value of non-agency B-pieces across 18 deals.
The top 3, Eightfold Capital (6), Rialto Capital (5), and LNR Partners (3), account for 80% of the purchases by deal count. In total, S&P said that 15 firms are reportedly bidding on B-pieces this year, including several hedge funds.
By comparison, in 2012, 9 buyers purchased $2.2 billion in par value.
In a March guide to alternative CRE investments, RBS also highlights the attraction of the asset class to a growing base of investors.
“Investors are looking to move lower in the capital structure to the B-piece in their search for yield,” said analysts. “Further more, non-traditional investors, such as CLO equity investors, may look to diversify into b-pieces in order to grow assets under management in an alpha producing manner.”
