Conduit CMBS
Asset-Backed Securities glossary · Asset Specific Nuances
Definition
A multi-loan, multi-borrower CMBS transaction aggregating roughly 40-100 commercial mortgage loans (typical deal: 40-80 loans) across geographic and property-type diversity, contributed by one or more originating banks. Pool sizes are typically 700M-1.5B with individual loans ranging from 2M to 200M.
Conduit CMBS in plain English
A conduit CMBS is a giant grab-bag bond built from many separate commercial property loans — usually 40 to 100 of them, from different borrowers, in different cities and different property types (offices, malls, warehouses, and so on). The whole point is safety through variety: if one mall struggles, the other 60-plus loans keep the money flowing, so no single problem sinks the deal. A bank (or a few banks) rounds up all these loans, typically totaling somewhere between $700 million and $1.5 billion, and packages them together — kind of like a mutual fund, but made of building loans instead of stocks. Individual loans in the pool can run anywhere from about $2 million to $200 million.
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