The CMBS market grew considerably quiet last week with a few deals pre-marketing but little other action worthy of mention. Looking forward, there is a mixed view on spread performance, but, in the main, there are more risks associated with a tighter spread bias than a widening one.

This is mainly because of the pipeline. There are two conduit transactions currently making the rounds - GECMC 04-C3 and MSCT 04-TOP15 - which total about $2.3 billion. Aside from those issues, another $5.5 billion is possibly slated for the month. Last week, spreads in the 10-year triple-A sector for new paper were as high as 36 basis points over swaps. However, some dealers were reporting secondary levels a bit tighter at the start of last week with the pipeline cleaned out. Investors are reticent to turn the market around quickly, so spreads in the low-to-mid 30s seem to be in place for the near term.

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