Upcoming Maturities & Refinancing Risks: A Comprehensive Analysis Across Asset Classes

The text discusses the risks associated with upcoming maturities in various asset classes, particularly in the commercial real estate (CRE) market. Banks, which are a significant lender group to the CRE market, are facing increased scrutiny and regulatory changes that could limit their ability to buy senior tranches of securitized products. The document estimates that a total of $3 trillion of market debt will mature by the end of 2024, and another $2.3 trillion will mature in 2025. Refinancing risks are front and center for US commercial real estate, and while the quantum of upcoming maturities is significant, balance sheet liquidity is healthy. The impact of higher refinancing costs will take time to feed into interest expenses and coverage ratios. The document recommends shorting the AAA tranches of CMBX 15/16 as a tail hedge and screening for single names with high refinancing needs and poor economics across DM and EM HY. The text also discusses risks in European and Asian credit markets and recommends specific bonds to buy in these markets.