February closed with more of the same impressive spread tightening that CMBS experienced over the past month, according to a Trepp report.
Despite a sagging U.S. stock market on Wednesday, CMBS spreads managed to tighten on above average volume. Yesterday legacy super seniors closed another one to two basis points tighter marking "five straight winning sessions for the CMBS market to close out the month," the report stated.
The benchmark GSMS 2007-GG10 A4 bond finished the day one basis point tighter at 219 basis points over swaps. Trading in CMBS was brisk with two-way flow and volume of $475 million.
In the derivatives markets, CMBX triple-A's were up a quarter point and AJs were up an eighth of a point, Trepp reported.
"As for the CMBS 2.0 market, demand continues to be strong down the capital stack for credit bonds," the report noted. "This is due in part to a lack of supply and may bode well for new issuance coming over the next few weeks."