CMBS loans are priced by taking the appropriate swap or Treasury rate and adding a credit spread, which compensates the lender for their work during the loan application and underwriting process.
CMBS Pricing: What You Need to Know
CMBS Credit Spreads: What You Need to Know
CMBS credit spreads are defined as the difference between the appropriate swap or Treasury rate and the interest rate of the CMBS loan. CMBS loan pricing is based on the current swap rate or U.S. Treasury rate plus this credit spread, which compensates the lender for the risk of providing the loan to the borrower.