S&P Sees Strong CMBS Issuance

Issuance of commercial mortgage-backed securities should reach approximately $70 billion for 2003 even if interest rates rise modestly, according to Standard & Poor's Ratings Services.CMBS issuance totaled about $60 billion in 2002 after reaching a near-record $74 billion in 2001, according to the rating agency. "We expect interest rates to either remain stable or increase slightly," said Kim Diamond, a managing director in S&P's structured finance ratings group. "But any change would not be significant enough to put a major damper on origination volume. Rates will still be historically low." The expiration of lockouts and prepayment penalties, and the maturities of many "first-generation" conduit loans, are also factors expected to aid CMBS issuance. S&P can be found online at http://www.standardandpoors.com.