Is CMBS Back on Oxygen Support?

Prior to trash talking government bonds last week, Standard & Poor’s shockingly announced that its CMBS rating model had a major bust. Many of us who still carry scars from our days as analysts and associates in I-banking were bemused by the admission and wondered why no one was sacked. The news caused spasms in the CMBS industry with one participant forecasting a “potential 20% decline in total deal volume for the remainder of the year.”

In regards to S&P, perhaps we should take small comfort in that they apparently have rediscovered the holistic benefits of accurate ratings. It is as if S&P is whispering to the Department of Justice, “Just in case, on a whimsy, you intend on holding us accountable for our role in the CMBS fiasco, please see us as repentant.”