Almost two-thirds of the conduit loans reaching their balloon date in January paid off on time, according to data from Trepp. In fact, the 66.9% of loan payoffs was the second highest in the last four years, topped only by September’s 68.2%.
In addition, 82% of the loans due in November (including the 63% which paid on time) were paid off three months later.
Trepp noted that the makeup of the underlying pool is a consideration if a conduit loan will pay off on time. Loans from older vintages will have a much better chance of paying off on time than loans from 2007.
However, with new issue commercial mortgage-backed securities spreads at their tightest levels in four years, and with the Treasury curve near historic lows, Trepp believes more loans should be able to refinance now than at any time since 2008.
