With CMBS issuance dropping off due to competition from banks and insurers, investors are turning to CRE CLOs.
Investors face headwinds as market forces conspire to end the property price appreciation trend.
Resistance to spread tightening lifted in the third quarter as yields rose on the back of higher benchmark rates.
Tight spreads present an opportunity to move up in quality and liquidity.
Technicals support short-term performance, but many municipalities are ill-prepared for an economic downturn.
Favorable credit trends and market technicals allowed the sector to shrug off slowing housing activity and higher interest rates.
The yield curve should flatten further as economic strength continues to justify Fed tightening.
Factors that have contributed to strong earnings growth this year will fade in 2019 and turn into headwinds in 2020, exposing leveraged corporate borrowers.
Steady performance despite market volatility in the first half of 2018 validates the sector’s defensive profile.
Supply weighs on CLO markets, but opportunities abound in commercial ABS.
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