The SASB Scoop UPDATE: Mind the Docs

Research evidence excerpt

The SASB Scoop UPDATE: Mind the Docs

Barclays | The SASB Scoop

• Tales from the Tapes highlights the recent revaluation of Wells Fargo Center (MSC 2019-

NUGS), down 82% since issuance, as well as two loans that transferred to special servicing in

June, 26 Broadway (BWAY 2022-26BW) and Fairmont Austin (GSMS 2024-FAIR).

• SASB spreads were generally flat to wider in June. We believe the SASB credit curve could

steepen, and we prefer remaining at the top of the capital stack for most deals, with the

exception of data center deals, where we favor buying down the capital stack for investors

that get comfortable with data center risk.

• Issuance remained high in June, and is on track to hit record-high issuance this year. We are

now seeing more fixed-rate issuance, likely due to an uptick in office and retail transactions,

as well as changing views on future rates.

• Delinquencies improved, but the special servicing rate rose, as two loans became delinquent,

two cured, and two transferred to special servicing.

• Property Valuations and Losses. Currently, 17 deals report shortfalls to the AAA class,

accounting for 1.5% of the SASB universe, by balance. In addition to Wells Fargo Center (MSC

2019-NUGS), we highlight three other loans that reported updated appraisals.

• Upgrades outnumbered downgrades in June, although two front-pay bonds were

downgraded. At first, we were surprised at S&P's downgrade of BAMLL 2016-ISQ, A to BB, but

upon closer review, we agree with the rating agency's determination.

• Maturity performance is still improving. Although only 30% of 1Q maturities repaid, 2Q

performance rose to 49%. Already, 50% of 3Q maturities and 31% of 4Q maturities have

repaid.

We include an Excel attachment with our database of key  SASB Deal Surveillance