The commercial mortgage-backed securities market had a record June, with $20 billion of new supply coming to the new issue market. Yet despite this heavy influx and seemingly negative technical overhang, spreads on triple-A bonds have either tightened by one or two basis points or remained flat, said Marielle Jan de Beur, an analyst at Morgan Stanley. "Historically, the relationship between CMBS spreads and new supply has been fairly undetectable because other market factors have outweighed the effects of issuance on trading levels," she said.
Jan de Beur attributed the tightening to the numerous structural innovations that have been a part of most new deals, most of which have been as a result of reverse inquires from investors. "As a result, bonds are capable of being placed in spite of heavy supply," she said.