The week following the Commercial Mortgage Securities Association annual conference in Florida normally sees a pickup after a pre-conference moratorium on issuance. Now five deals are in the CMBS pipeline and one is already setting price guidance.
The afterglow of the conference is about ready to morph into some real production. Spreads are mostly unchanged to slightly tighter as the secondary market stepped to the front and fed strong demand both on dealer inventories and bid list supply. Spreads are almost a basis point tighter in the IGs and about unchanged to a tad wider in the lower tranches, as most of the secondary items sold were longer triple-As. This temporarily sated the demand of under allocated accounts still light from the last deal barrage of 2006. The pipeline is not expected to get in the way of spread tightening until the supply picks up next month, with more than $30 billion slated to hit the shelves.