CMBS

  • Going soft?

    Changing underwriting standards pose CMBS threat

    The loans backing this year's US CMBS issuance exhibit looser underwriting standards than the market has become used to in the aftermath of the financial crisis. While such a loosening of standards should not be ignored, it does not appear to have the market overly concerned either, as investor appetite for the product remains strong.

    The underwriting standards typical of .......

    News Analysis 24 April 2012

  • EMEA CMBS loan transfers continue apace

    The total number of loans in special servicing across EMEA CMBS large multi-borrower and single-borrower transactions monitored by Moody's decreased by one loan to 132 as of end-March, according to the agency's monthly update on the sector. Two loans were newly transferred during the month, while three loans have been removed from special servicing as their workouts were completed.

    Among .......

    News Round-up 23 April 2012

  • Special servicer switched

    Torchlight Debt Opportunity Fund II, the directing certificate holder on GE Commercial Mortgage Corporation Commercial Mortgage Pass-Through Certificates Series 2007-C1 (GECMC 2007-C1), intends to exercise its rights pursuant to Section 7.01(c) of the Pooling and Servicing Agreement (PSA) to replace LNR Partners as the special servicer and to appoint Torchlight Loan Services as the successor special servicer.

    Moody's has reviewed .......

    News Round-up 20 April 2012

  • Fannie Mae sees robust multifamily issuance

    Fannie Mae issued US$7.1bn of multifamily MBS in 1Q12 backed by new multifamily loans. The agency also resecuritised US$2.6bn of DUS MBS through its Fannie Mae Guaranteed Multifamily Structures (Fannie Mae GeMS) programme in the first quarter.

    "The strength of the Agency CMBS market is evidenced by robust volumes coincident with improving credit quality," says Kimberly Johnson, Fannie Mae vp of multifamily .......

    News Round-up 20 April 2012

  • Rise in NPL CMBS volume predicted

    The recent Rialto securitisation of non-performing commercial real estate (CRE) loans represents the beginning of a trend, according to Fitch, given the volume of distressed CRE lingering with servicers and lenders and the increased use of loan sales to dispose of troubled CRE loans.

    Since 1Q09, US$161bn of CMBS loans have been transferred to special servicing and, since 2010, the .......

    News Round-up 19 April 2012

  • EMEA CMBS subordination scrutinised

    Widespread structural flaws in EMEA CMBS transactions undermine the intended subordination of junior to senior noteholders, Fitch notes.

    In particular, loans failing to repay at maturity expose senior noteholders to interest rate risk. This is not allocated solely to junior investors by standard priorities of payments, which tend to be separate for interest and principal.

    The underlying interest rate risk .......

    News Round-up 19 April 2012

  • Opera Uni credit bid voted in

    Opera Finance (Uni-Invest) class A noteholders yesterday approved the credit bid option presented by TPG and Patron Capital (SCI passim), following their rejection of the consensual restructuring option. Class B, C and D noteholders voted in favour of the latter proposal, but the resolution required approval by 75% of each class.

    Class A noteholders will now receive an immediate cash .......

    News Round-up 18 April 2012

  • CMBS LTVs set to increase

    The leverage on loans backing upcoming US CMBS conduit transactions is poised to increase, Moody's reports in its quarterly review of the sector. The agency notes that several conduits in its 2Q12 pipeline have collateral pools with average leverage approaching or exceeding 100% Moody's loan-to-value ratio (MLTV).

    "While final pool composition is still subject to change, should the more highly .......

    News Round-up 17 April 2012

  • German multifamily exposures eyed

    Of the large German multifamily CMBS portfolios, only Grand will extend, suggest ABS analysts at Deutsche Bank.

    The analysts cite GAGFAH's recent upbeat conference call on both the €1.1bn WOBA loan (split equally between WINDM IX and DECO 2007 E5X) and the €2.2bn GAGFAH 1 loan (securitised in GRF 2006-1), which mature in 2013, as a basis for this view. .......

    News 17 April 2012

  • CRE trio join new office

    Walker & Dunlop has hired three veteran originators for a new office in Fort Lauderdale. Paul Ahmed, David Gahagan and Lance Lehman each join as vp and will focus on financing income producing properties in the southeast region.

    The group join from Grandbridge Real Estate Capital, where Ahmed and Gahagan were vps and Lehman was svp. All three specialise in .......

    Job Swaps 16 April 2012

  • Keops loan repaid

    The sale of the final remaining two properties under the Keops loan, securitised in Juno (Eclipse 2007-2), has resulted in the full repayment of the outstanding amount of the senior loan. The loan was outstanding by €13.35m-equivalent - accounting for 3.09% of the pool - before the repayment.

    Previously, the sale of 276 underlying properties had been completed successfully through .......

    News Round-up 16 April 2012

  • Market in need of direction

    European CMBS currently looks cheap, but that is not enough to convince buyers to take the plunge as the secondary market remains quiet. BWIC activity has become more sporadic, although increased activity in the primary market could provide a boost.

    "The week before Easter was very quiet. Before that, there had been a lot of BWICs, but over the last .......

    Market Reports 12 April 2012

  • CMBS loan takes mod loss

    The US$81m Grand Traverse Mall loan securitised in GECMC 2005-C4 has taken a US$19m loss. The loss looks to be due to a modification associated with Rouse Properties' purchase of the GGP-sponsored asset in February.

    As well as the mod resulting in the balance of the loan being reduced to US$62m, the loan maturity has been extended from October 2012 .......

    News Round-up 11 April 2012

  • CMBS concerns over low DSCR

    The US$246m Atrium Hotel Portfolio loan has been put on Morningstar's watchlist because of worryingly low debt service coverage and the expiration of the loan's IO period. The loan is the largest in the ML-CFC 2006-3 transaction and represents 11% of the pool by unpaid balance.

    The debt is secured by fee and leasehold interests in six full service hotels, .......

    News Round-up 11 April 2012

  • Sharp drop for CMBS payoffs

    The percentage of US CMBS loans paying off on their balloon date retreated sharply in March, according to Trepp's March Pay Off Report. This dip comes one month after the reading hit its second highest level since December 2008.

    In March, 36.4% of loans reaching their balloon date paid off. Only May 2011 had a lower reading over the last .......

    News Round-up 10 April 2012

  • CMBS gaps out on ML3 concerns

    Supply concerns last week drove the first major widening in US CMBS spreads since the beginning of the year. The move follows rising expectations of potential sales from the Maiden Lane III portfolio.

    Generic 2007 LCF and AMs gave up nearly 20bp-30bp over the week to finish Wednesday at 190bp over swaps and 450bp over respectively. The effect was felt .......

    News 10 April 2012

  • Japan capital markets team poached

    White & Case has expanded its capital markets practice in Tokyo. Norifusa Hashimoto joins the firm as a local partner along with Seiji Matsuzoe and Aya Kurahashi, who join as counsel and associate, respectively.

    All three join from Allen & Overy, where Hashimoto was partner and co-head of capital markets for Japan. Hashimoto specialises in debt private placements and repackagings, .......

    Job Swaps 5 April 2012

  • Solana delinquency drives CMBS late-pays

    US CMBS late-pays last month rose by 13bp to 8.43% from 8.3% in February, according to Fitch's latest index for the sector. Helping to drive the increase was the continued underperformance of the US$360m Solana loan, now officially classified as 60-days delinquent. Prior to March, overall delinquencies had declined every month after hitting a high water mark of 9.01% in .......

    News Round-up 5 April 2012

  • Noteholder divide

    Legacy investors seek Dutch de-risking

    Noteholder division over the competing Opera Finance (Uni-Invest) proposals is emerging (see also SCI 3 April). Some legacy holders of the CMBS paper look set to vote for the credit bid option as a way of reducing their exposure to Dutch secondary properties.

    "What concerns me is credit risk; specifically, Dutch secondary real estate risk," confirms one Opera Uni A .......

    News Analysis 5 April 2012

  • 'Bad boy' rulings net credit positive for CMBS

    Michigan governor Rick Snyder last week signed into law the Nonrecourse Mortgage Loan Act, overturning two court rulings - known as the Cherryland/Chesterfield cases - that rocked the US commercial real estate space last December. The two decisions converted many 'bad-boy' non-recourse carve-out guaranties effectively into full credit recourse guaranties any time an SPE CRE borrower becomes insolvent, even if .......

    News Round-up 5 April 2012

  • New US CMBS defaults set to slow

    The pace of new US CMBS defaults will slow again this year, as seen in 2011, according to Fitch's latest annual default study. The cumulative default number is expected to reach 14.5% by the end of 2012.

    The cumulative CMBS default rate closed out last year at 12.7% (US$71.3 billion). New defaults finished 2011 38% lower (950 loans totalling US$13.7bn) .......

    News Round-up 5 April 2012
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