Last week the treasury hit a low of 2.35 and is closing today at 2.43. The chief reason for the drop in the Treasury is stems from a flight to quality due to global concerns (Mideast, Ukraine, Ebola, economic concerns in Germany and China). Up until now the credit markets (CMBS spreads) have been immune to such concerns. Spreads have rallied unchecked for an extended period of time without any disruptions. That trend ended in the past few weeks as CMBS spreads have widened 15-20 basis points. CMBS investors are concerned about achieving a minimum yield, therefore demanding a wider spread over treasuries as yields creep down. Investors in the credit markets are also reacting to the aforesaid global concerns, a large supply of new CMBS bond issuance, and a perception that underwriting standards have become more aggressive. Additionally the swap spread has widened with the ten year swap which has stood firm at 11 basis points now widening to 15-17 bps. The swap spread has widened on the expectation that floating rates (such as libor) are finally expected to rise as early as 1st quarter 2015 (note that the swap spreads are based upon the relationship between fixed and floating rates).　 New loans for full leverage ten year are still being priced in the 4.50 – 4.60 range however uncertainty in the markets has increased.