Single-asset single-borrower (SASB) loans

What makes SASB different from a conduit loan

A conduit loan is one of dozens in a pool. A SASB loan is the whole pool. The bond investors are lending against a single building, campus or portfolio and its sponsor, so they read that asset’s rent roll, leases and market in detail, the way a balance-sheet lender would. In exchange, the loan can be structured around the asset instead of a pool template: floating rate, extension options, release prices for a portfolio, and a mezzanine layer sold to a separate investor.

Through September 2026, CRED iQ counted $66.0 billion¹ of SASB and large-loan issuance, against $21.2 billion¹ for conduits. Other trackers count differently, so treat one source’s numbers as one view of the market.

Floating or fixed

	Floating-rate SASB	Fixed-rate SASB
Index	Term SOFR plus a spread	The Treasury or swap rate for the term, plus a spread
Term	Short initial term plus borrower extension options	Set term chosen at closing
Rate protection	A purchased interest rate cap, usually renewed at each extension	Built in
Prepayment	Spread maintenance for an initial period, then open	Lockout and defeasance or yield maintenance, as in conduit
Typical use	Assets with some upside or a likely sale	Long-hold stabilized institutional assets

Floating SASB is the majority because large owners want prepayment flexibility and expect to sell or refinance inside a few years. The cost of that flexibility is the cap and the extension tests.

Sizing: why the asset story matters more

Because every bond class is backed by the same asset, rating agencies apply their own haircut to the sponsor’s cash flow and value, then decide how much of the loan can be rated at each level. A loan with a stable, diversified rent roll can carry more rated debt than one dependent on a few tenants or a single market. Anything above the amount the bonds can carry is usually placed as mezzanine debt with a separate investor.

Illustration only, with a hypothetical spread (no public source publishes SASB loan spreads): a $250,000,000 floating loan on an asset with $20,000,000 of net cash flow. With an assumed 3.00% spread and a rate cap struck at 4.00%, the worst-case coupon is 7.00% and interest is $17,500,000 a year, so the asset still covers interest 1.14 times at the cap strike. Lenders choose the strike so that coverage at the cap stays above their floor. A higher strike makes the cap cheaper and the coverage thinner. Test the blend of senior and mezzanine cost in the blended rate calculator.

Costs and timeline

• Origination fee to the bank that originates and later securitizes the loan.
• Rate cap on floating loans, priced by the dealer at closing; the cost rises with rate volatility and the strike’s distance from the current index.
• Rating agency, trustee and legal costs, built into pricing or charged at closing.
• Reserves and cash management: a hard or springing lockbox and cash sweep triggers tied to debt yield.
• Timing. The bank usually closes and holds the loan, then sells the bonds afterwards. The single-asset rating work runs in parallel and is more detailed than for a pooled loan.

What underwriters and rating agencies check

1. Tenant credit and lease term on office, industrial and retail; operating history and market supply on hotels and apartments.
2. The sponsor’s track record with that property type and its ability to fund the cap, reserves and any shortfall.
3. Release prices on a portfolio, so the best assets cannot be sold off and leave the bonds with the weakest.
4. Extension conditions the borrower can realistically meet.
5. How the property performed in prior downturns and what its cash flow looks like under the agency’s own stressed assumptions.

Common deal killers

• A loan that is too small to absorb the fixed cost of its own securitization.
• An asset story the bond market will not pay for, such as heavy near-term rollover. A debt fund loan often prices that risk better.
• Extension tests set too tight. A borrower that cannot extend faces a forced refinance at whatever the market offers.
• Weak property types in a weak year. Trepp’s September 2026 CMBS delinquency rate was 8.02%², and office was 12.16%²; investors price that history into new office deals.

Where it wins and where it loses

SASB wins for very large, high-quality assets and portfolios where one lender would not want the whole exposure and the bond market can price the asset tighter than a fund. It competes with life company loans on the best stabilized assets (life companies are usually more flexible after closing) and with debt fund loans on transitional ones (funds move faster and accept more complexity). It loses on smaller loans, on business plans that need a hands-on lender, and whenever the borrower expects to renegotiate.