Solve News Flash: An excerpt from Methodical’s March Commentary
March 3, 2021
While senior CMBS bonds have rallied to pre-pandemic tights, BBB- bonds from hotel and retail heavy deals are still offered at heavily discounted levels similar to those observed in December.
Doing some back of the envelope math of the over $400 billion of conduit CMBS outstanding (per SIFMA), 27% is retail collateral and 13% is hotel for a total of $160 billion, and given about 13% of retail and about 20% of hotel collateral is delinquent, there should be about $24 billion of distressed loans in conduit deals and perhaps another $10 billion in SASB deals for a total of $34 billion in CMBS. Real Capital Analytics estimates $146 billion across all CRE is in distress, at serious risk of bankruptcy or default. While some of these loans will benefit from an economic recovery, others – especially high-delinquency retail – may share the fate of Fashion Outlets of Las Vegas.
About Solve Advisors, Inc.
Founded in 2011, Solve’s mission is to deliver transparency to the famously opaque Fixed Income market. We provide the Fixed Income industry with the most comprehensive, accurate, and real-time pricing information and market color available.
Powered by machine learning and natural language processing, our sophisticated, flexible technology collects more data and market color when and how you need it. We house the largest dataset (500,000+) of bids, offers, and market color across five asset classes (Structured Products, Corporates, Bank Loans, CDS, and Municipals). Our powerful workflow tools eliminate the hassle of the BWIC process, consolidate dealer inventories, and streamline month-end for the back office, all in one place and at your fingertips.
To learn more, visit www.solveadvisors.com or contact us directly: email@example.com or +1-646-699-5041.
Stay up-to-date on the latest from Solve