CMBS Issuance Edges Up With Momentum from Hotels.(Commercial Mortgage Backed Securities )

New York -- Moody's is expecting issuance of U.S. commercial mortgage-backed securities to touch $100 billion for 2005, following issuance of $93 billion for 2004.

Tad Philipp, managing director for CMBS, Moody's, said, "U.S. issuance will be boosted by several new issuers and by hotel-backed transactions returning to favor helping top off an already robust pipeline.

"In addition we expect to see the introduction of new collateral types such as condo conversion loans, as well as further development of synthetics."

As well, a number of loans are maturing this year that were made during the peak origination years of the late 1990s and are eligible for refinancing.

Mr. Philipp expects that many of these loans are likely to refinance with higher proceeds than the last time around considering that property prices have appreciated and interest rates have fallen since the late 1990s.

Moody's is also anticipating a continued shift towards larger deals, a trend that the rating agency says began in 2004.

"Larger deals introduce efficiencies on several levels, helping drive their growing popularity. From the investor perspective, the larger class sizes of bigger deals offer greater liquidity. From an issuer perspective transaction, costs can be reduced by coming to market somewhat less often but with larger deals," Mr. Philipp said.