This could prove to be a record year for the issuance of U.S. commercial mortgage-backed securities, with total issuance of $87 billion, according to Moody's Investors Service.The projected total includes $65 billion of issuance at the end of the third quarter and another $22 billion in the pipeline. At the rating agency's sixth annual CMBS conference, Moody's analyst Jim Duca reported that fusion deals are dominating the issuance, accounting for 79% of Moody's-rated deals as of the third quarter. And expectations of higher interest rates have caused a 30% increase in fixed-rate issuance so far, compared with that of last year ($52 billion, or 80%, of the Moody's-rated deals so far this year are fixed-rate). Regarding the impact of a rising interest rate environment, analyst Tad Philipp said he expects that the appetite of the government-sponsored enterprises for multifamily-backed CMBS may decline as home refinancings decline. Mr. Philipp said Moody's does not necessarily believe that a rising economy will lead to rising rents in all cases, and that the laws of supply and demand still apply to real estate. Moody's can be found online at http://www.moodys.com.
