Good morning. It is Saturday, May 16, 2026, and this is Debt Desk.

We begin with the national picture, and the first story is the same one we have been tracking all week: the Trump-Xi meeting and what, if anything, it really changed. The Associated Press reported Friday that President Trump wrapped his Beijing trip still describing the relationship with China as being in a good place, while Reuters reported that he said he discussed Taiwan arms sales with Xi and would make a decision soon. So the practical takeaway is that the summit produced a softer tone, but not a clean resolution. Trade, Taiwan, and the broader geopolitical risk premium are all still in play. For markets, that matters because investors are still trying to decide whether this was a real de-escalation story or just a temporary pause in the rhetoric.

The second national story is another ongoing thread that picked up a meaningful development inside the last two days. Reuters reported Thursday night that the Supreme Court preserved access to mifepristone while the case continues, which means mail and pharmacy access stay in place for now. That keeps a major social and legal fight active heading into the weekend, and it adds to the sense that Washington is moving on multiple fronts at the same time. It is not directly a debt-market headline, but it absolutely contributes to the policy noise level that borrowers, lenders, and investors are operating inside.

The third national story is the market reaction to inflation and energy pressure. AP reported Friday that global and U.S. stocks pulled back from record levels as higher oil prices rattled the bond market, while Reuters reported that oil rose more than 3 percent on Friday and Treasury yields surged as investors worried about the inflation impulse coming from the Middle East conflict. That gives us the current national mood in one line: geopolitical risk is still feeding straight into inflation anxiety, and inflation anxiety is feeding straight into long-end rates. If you finance real estate for a living, that chain reaction is the whole ballgame.

So the broader national backdrop this morning is pretty clear. The China summit did not remove the geopolitical overhang. The Supreme Court added another live political flashpoint. And the bond market finished the week acting like the inflation story still has more bite than investors hoped. That sets the table for everything else we are about to discuss.

Now let’s turn to the Debt Desk.

Start with rates, because rates are still the first filter on almost every capital stack. The latest official Federal Reserve H.15 release, published Friday, May 15, shows the Treasury constant maturity curve through Thursday, May 14 at 4.00 percent on the 2-year, 4.13 percent on the 5-year, 4.47 percent on the 10-year, and 5.02 percent on the 30-year. That is not just a high 10-year story. The whole curve matters right now.

The 2-year at 4 percent says policy expectations are still sticky and the market is not confidently pricing a fast march into easier money. The 5-year at 4.13 matters because that part of the curve drives a lot of real mortgage math even when people speak casually in 10-year shorthand. The 10-year at 4.47 is still the benchmark everybody watches for permanent debt. And the 30-year north of 5 percent is the part that keeps reminding life companies, pensions, and other duration-sensitive lenders that they still want serious compensation before locking in long money. If you are a borrower hoping fixed-rate execution gets meaningfully easier just because the 10-year backs up a little less than the long bond, that is not the message this curve is sending.

On the floating-rate side, the New York Fed continues to show SOFR in the mid-3.5 to mid-3.6 range, and the official 90-day average published through mid-May was about 3.66 percent. In other words, floating debt is workable, but it is not cheap in any practical sense once you add spread, cap cost, reserves, and extension structure. That leaves sponsors in the same position they have been in for a while now: bridge debt still works when the business plan is clear, but it demands discipline on leverage and a believable takeout path.

That discipline is exactly what the market is rewarding. The broad lending tone still looks constructive, but only for clean stories. GlobeSt reported this week that CBRE’s Lending Momentum Index hit its highest level since 2021 in the first quarter, with average CRE spreads down to 181 basis points and multifamily spreads down to 136 basis points on fixed-rate seven- to 10-year loans at moderate leverage. The same report said alternative lenders, especially debt funds and mortgage REITs, more than doubled their share of lending activity over the last year, while banks, life companies, and CMBS all lost share. That tells you the market is open, but the composition of the market has changed.

Banks are still there, but generally for lower leverage, cleaner sponsorship, and easier-underwrite cash-flow stories. Life companies still matter, especially for stabilized assets where proceeds can stay disciplined and the sponsor wants long-duration fixed-rate money. CMBS still works, but mostly when size, sponsorship, and collateral quality justify the structure. Debt funds remain central because they can solve for complexity, future funding, lease-up risk, and transitional business plans that balance-sheet lenders do not want to own. The spread map today is really a complexity map.

That is especially visible in multifamily. Multi-Housing News reported on May 14 that bank construction quotes are coming in at the low 200s over SOFR, with select deals even tighter, while debt funds are competing in the high 200s for larger transactions and the low-to-mid 300s for more middle-market executions. The report cited real quotes at 350 over SOFR for 80 percent loan-to-cost and 335 over for a roughly $40 million loan at 65 percent LTC. That is strong evidence that multifamily debt is not the bottleneck on many projects. Equity is often the harder piece.

Friday’s deal flow backed that up. Multi-Housing News reported that The Dermot Company secured a $355 million refinancing for its 616-unit tower at 21 West End Avenue in Manhattan, with Mizuho Americas providing the loan through New York State Homes and Community Renewal. That is a meaningful same-day data point because it shows there is still appetite for large, institutional-quality apartment refis in gateway markets when the asset and sponsorship are straightforward.

The same outlet also reported Friday that Rabina and New Blueprint Partners secured $75 million in construction financing for the first phase of The VIC, a 250-unit multifamily development in Vancouver, Washington. The loan is floating-rate and three years, which fits the current playbook almost perfectly. Sponsors are still getting construction debt, but they are generally getting it in structures that preserve flexibility and assume a later permanent financing handoff once the property is further along.

And there was another useful financing signal Friday in the conversion lane. Multi-Housing News reported that the historic Bank of Italy tower in San Jose landed $74.1 million for an office-to-residential conversion. That matters because conversion financing remains one of the cleaner ways to express both the office reset and the housing shortage in a single transaction. It also shows that capital is still willing to back apartment-adjacent stories that solve a real use-case problem, even if plain-vanilla office remains difficult.

On the office and CMBS side, the story remains selective rather than broad. The big positive read from earlier this week was still Brookfield and QIA’s $1.9 billion CMBS refinancing for 2 Manhattan West, which we discussed yesterday. But Friday also gave us a reminder of the other side of the market. Commercial Observer reported that the $647.5 million CMBS loan on 20 Times Square returned to special servicing after missing its May 2026 maturity. That contrast is the market in miniature. Trophy office with institutional sponsorship and a clear story can still clear. Complicated or underperforming collateral tied to older assumptions is still running into the wall.

That is why borrowers need to pay attention to more than just whether “the market is open.” The market is open for some things and highly conditional for others. If you have best-in-class collateral, strong sponsorship, and realistic leverage, you have options. If you need leverage, future funding, lease-up flexibility, or time, the debt-fund universe is still doing the heavy lifting. If you are trying to refinance an asset whose thesis no longer matches lender risk appetite, wider spreads and servicing workouts are still very much on the table.

The agency channel remains a major stabilizer for multifamily. Freddie Mac’s published securities pricing page continues to show a live multifamily securitization machine, including fixed-rate SB and K executions that have continued to clear this spring. Fannie Mae’s first-quarter multifamily update said new business volume reached $17.1 billion and financed about 110,000 rental units, with more than 80 percent of those units affordable to households at or below 100 percent of area median income. At the same time, Fannie also said its first-quarter multifamily credit-loss provision rose to $174 million, driven by higher delinquencies and weaker valuations on loans where foreclosure was probable. So the agency story is not that everything is easy. The story is that the deepest permanent takeout lane is still functioning, even while legacy stress keeps surfacing in older vintages.

HUD and FHA are also worth keeping on the board. HUD announced this wee...