BOSTON—CMBS whole loan prices were up nearly 5% in February versus the prior year, according to DebtX, highlighting the favorable seller’s environment for these securities. The reasons for the significant uptick, the company said, included improving loan-to-value ratios and debt service coverage, as well as fairly stable interest rates.
“Based on this data, it is hard to say that things aren’t fundamentally improving,” Managing Director Will Mercer tells GlobeSt.com. It is important to note that this data is not reflective of the pricing of actual CMBS bonds, which could be affected by any number of technical or market issues. Rather, DebtX prices the underlying collateral. For that reason, the data is particularly telling for lenders who might be wondering about the health of their current loan portfolio or thinking about selling some of their loans. Investors or buyers of mortgages would also find the data relevant.
Among Debtx’s findings for February:
- The estimated price of whole loans securing the US CMBS universe increased to 94.7% as of February 28, 2014 from 94.1% as of January 31, 2014. Loan values were 89.8% on February 28, 2013.
- The weighted average monthly price of impaired performing loans traded at DebtX’s marketplace was 81.4% in February 2014, up from 79.8% in January 2014. Prices were 78.9% in February 2013.
- The weighted average monthly price of non-performing CRE loans traded at DebtX’s marketplace was 49.6% in February 2014, down from 50.5% in January 2014. Prices were 52.9% in February 2013.
- The Loan Liquidity Index, a monthly barometer of liquidity for pools of loans sold at DebtX, was 118.2, up from 114.5 in January 2014. The Index was 109.9 in February 2013.