BOSTON—Pricing on commercial real estate loans underlying the CMBS universe ticked upward in November, DebtX said Wednesday. This followed a decline in October, and as with October's 100-basis point drop in the price of whole loans to 97.4%, DebtX attributed it in part to fluctuations in Treasury spreads.

"CMBS loan prices gained in November, but edged down year-over-year," says Will Mercer, managing director at DebtX. He adds that November's monthly increase can be attributed to "a rise in the Treasury yield curve and a small increase in credit spreads."

As of the end of November, DebtX had priced $896 billion in commercial real estate loans that collateralize US CMBS trusts, up from $885 billion in October, the second consecutive monthly increase. The estimated price of whole loans securing this universe increased 20 bps to 97.6% at the end of November. Prices were 99.1% in November 2014.

Median adjusted loan-to-value remained at 57% in November, and the median debt service coverage ratio also remained at 1.46, according to DebtX. The median estimated loan yield increased slightly to 4.5%.

Earlier this month, Kroll Bond Rating Agency provided a largely upbeat outlook report for CMBS in the months to come. "With economic growth expected to be positive in 2016, we believe that even if there are modest rate increases, commercial real estate fundamentals and valuations may be only marginally affected, if at all," according to KBRA's report. "CMBS issuance is on track to reach approximately $100 billion in 2015 and we expect issuance to reach $125 billion in 2016 and likely aided by the volume of loans scheduled to mature during the year coupled with borrowers seeking to lock in new financing in anticipation of a rising interest rate environment."

Along with the high demand for refinancing due to 10-year maturities in '16 comes "the continued deterioration of origination standards, which has maintained a downward trend over the past several years," KBRA says. With leverage having reached "new post crisis highs," debt service coverage has trended downwards despite an increase in exposure to interest-only structures. "In addition, there has been a notable increase in credit bar-belling as the proportion of high leverage loans has continued to increase," according to KBRA.

Nonetheless, KBRA says "the overwhelming majority" of rating actions in the coming year are expected to be affirmations. "Positive rating movement is also likely to occur, particularly on 2012-vintage transactions which are entering their fourth year of seasoning and have benefited from defeasance and deleveraging due to amortization," according to KBRA's report. The number of downgrades should be limited, and is expected to be limited mainly to speculative-grade rated classes.