Wells Fargo to take turn on BANK CMBS shelf
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Wells Fargo to take turn on BANK CMBS shelf

Commercial real estate

The issuance will be backed by a pool of 52 properties with an original loan balance of about $1.1bn.

Wells Fargo Commercial Mortgage Securities filed a 15-G form on May 31 for a new offering from the BANK, the conduit CMBS shelf used by major US banks.

According to 15-G documents, the deal BANK 2024-BNK47 is a conduit offering containing 52 properties across the retail, office, and hotel sectors, with a collective original principal balance of roughly $1.1bn.

This offering comes as the beleaguered CMBS is starting to look find followers.

According to a Bank of America Global Research report from Friday, CMBS conduit spreads have the potential to tighten across the stack as long as there is “an abatement in rate volatility”.

One senior securitization banker said that, given the ”substantial” amount of pressure on the banking community, assets that would have previously stayed on bank balance sheets ”need to find other places to fund”.

”That's been very conducive for ABS and CMBS issuance,” said the banker. ”Volatility is down, and spreads have stabilized or are relatively tight.

”The real estate market and therefore CMBS are definitely garnering a lot of attention.”

Bank of America was the depositor on this shelf's previous offering, BANK 2023-BNK46, last August.

Previous issuances from the BANK shelves have been led by a combination of BofA, JP Morgan, Morgan Stanley and Wells Fargo as bookrunners.

The BofA report noted that fundamentals behind CMBS are showing mixed performance.

Over the past year, the report said, retail delinquencies went from having the highest delinquency rates to steadily decreasing. Office space, on the other hand, continued to deteriorate — with delinquencies sharply increasing over the past year.

As of May 2024, 60 plus day delinquencies on office loans stand at 6.1%, compared to 3% last May. Special servicing rates — a sign of a distressed property — have also doubled for office loans since last May, up to to 10.1%.

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