CMBS

  • Stalwart Canadians

    Canadian CMBS better positioned than US

    There is some evidence that the Canadian CMBS market is in a better state to ride out the turbulence of the Covid 19 crisis than the US market, suggest analysts.

    “Taking the base case scenario (that the recovery will begin at the beginning of 2021) the Canadian CMBS market is better positioned. It’s not just a matter of .......

    News 24 April 2020

  • Non-agency CMBS goes it alone

    The non-agency CMBS market is an orphan of the storm

    While a raft of measures to aid liquidity and forestall insolvency have been introduced by the US authorities to asset-backed markets in recent weeks, the non-agency CMBS sector remains outside the umbrella, leading to fears it faces huge losses.

    GSE-backed CMBS are considered eligible as collateral under the terms of TALF 2.0, while in the private label sector .......

    News Analysis 24 April 2020

  • Grandfathering for Dutch CLO issuers

    Sector developments and company hires

    Grandfathering for Dutch CLO issuers
    The Dutch tax authorities have provided written confirmation to CLO issuers domiciled in the Netherlands that their recently revised position on the VAT exemption (SCI 10 March) will not apply with retroactive effect. Further, the VAT exemption will continue to apply to transactions for a grandfathering period until 1 January 2021. Issuers are continuing a .......

    Market Moves 23 April 2020

  • GSE advancing obligations aligned

    Sector developments and company hires

    GSE advancing obligations aligned
    The US FHFA has aligned Fannie Mae's and Freddie Mac's policies regarding servicer obligations to advance scheduled monthly principal and interest payments for single-family mortgage loans. Once a servicer has advanced four months of missed payments on a loan, it will have no further obligation to advance scheduled payments. When a mortgage loan is in an .......

    Market Moves 22 April 2020

  • Moody's puts CLOs under review

    Sector developments and company hires

    Moody’s puts CLOs under review
    Moody's has placed on review for downgrade its ratings on 859 tranches issued by 358 US BSL CLOs (plus another 25 linked US CLO combo notes, secured notes and repacks) and 117 tranches issued by 39 European BSL CLOs. The affected securities represent 19% of Moody's US-rated BSL CLOs and 14% of its European-rated CLOs.

    Market Moves 20 April 2020

  • Bright spot?

    European logistics gaining momentum

    The logistics sector is set to be a bright spot in European commercial real estate post Covid-19. Coronavirus impacts represent one of six fundamental factors behind the sector’s momentum, according to Scope Ratings, alongside growth in e-commerce, end-customer demands, supply chain optimisation, a supply-demand/supply imbalance and new urban developments.

    The agency suggests that these factors are strongly supportive .......

    News 20 April 2020

  • CMBS secured, unsecured sub debt weighed

    Sector developments and company hires

    CMBS secured, unsecured sub debt weighed
    Senior US CMBS loans with unsecured subordinate debt (such as mezzanine or preferred equity) show significantly lower default rates than senior loans with secured subordinate debt (such as B-notes) at comparable leverage points, according to Fitch. The agency evaluated the performance of 1,001 senior CMBS conduit loans with subordinate debt in place, issued between 2003 .......

    Market Moves 16 April 2020

  • Unified approach

    Canadian CMBS servicing challenges surveyed

    The Canadian CMBS market is expected to be more resilient to the coronavirus fallout than its US counterpart. Although tenant defaults and loan delinquencies are similarly likely to spike into 3Q20, to date Canadian servicers have seen relatively few borrower relief requests.

    Unique to the Canadian CMBS market, borrower requests for relief are initially reviewed by the subservicer .......

    News 16 April 2020

  • Forbearance foreseen

    Euro CMBS cash-trap thresholds eyed

    Three UK hotel CMBS and three Italian retail CMBS, representing just under £1bn and just over €1bn of securitised debt respectively, could become subject to cash-trapping if their LTV ratios are tested during the Covid-19 outbreak. However, should loan defaults occur, special servicers are likely to exercise forbearance while conditions improve.

    The three hotel CMBS – Helios (ELoC .......

    News Analysis 14 April 2020

  • TALF 2.0 eligibility expanded

    Sector developments and company hires

    TALF 2.0 eligibility expanded
    The US Fed has expanded the range of assets that are eligible collateral for TALF 2.0 to include the triple-A rated tranches of both legacy conduit CMBS and newly issued static CLOs. The size of the facility will remain US$100bn and it will continue to support the issuance of ABS that fund a wide range of .......

    Market Moves 9 April 2020

  • EIF calls for guarantee applications

    Sector developments and company hires

    EIF calls for guarantee applications
    The European Commission has unlocked €1bn from the European Fund for Strategic Investments (EFSI) that will serve as a guarantee to the EIF and allow it to issue special guarantees to incentivise lenders to provide liquidity to at least 100,000 European SMEs and small mid-cap companies hit by the economic impact of the coronavirus pandemic, .......

    Market Moves 8 April 2020

  • Modelling delinquency deluge

    Mortgage market advisers and consultants are struggling to f...

    “Our clients are modelling a range of scenarios but are preparing themselves for the worst case including sustained levels of unemployment. Hopefully it won’t be that bad, but they need to prepare themselves,” says Bernadette Kogler, chief executive officer of RiskSpan, a Washington, DC-based analytics and modelling firm which has particular expertise in mortgage markets.

    Riskspan clients include .......

    News 8 April 2020

  • CLO stress scenario updated

    Sector developments and company hires

    CLO stress scenario updated
    Fitch is set to apply an updated stress scenario to all CLO portfolios involving issuers with greater vulnerability to disruptions caused by coronavirus. The agency’s previous scenario focused on seven industries vulnerable to impacts from the pandemic, but will be expanded to include issuers with loans in CLOs from the automobile industry, as well as all .......

    Market Moves 7 April 2020

  • Negative outlook for asset performance

    Sector developments and company hires

    Negative outlook for asset performance
    Fitch is updating its rating assumptions for all global structured finance sectors to incorporate the economic impact of the coronavirus and related mitigation measures. The agency expects the global pandemic to result in an unprecedented economic contraction and while the rating effects will vary meaningfully across asset classes, asset performance deterioration is anticipated in almost .......

    Market Moves 6 April 2020

  • Breathing space?

    EU banks benefit from Basel 3 delay

    The Basel Committee's decision last week to delay implementation of the final Basel 3 rules by a year (SCI 30 March) gives banks and supervisors some breathing space to respond to the coronavirus crisis. However, the delay is expected to be more beneficial for EU banks compared to US banks.

    Fitch, for one, notes that the delay .......

    News 2 April 2020

  • CRR compliance for NHG guarantee

    Sector developments and company hires

    EMEA
    Addleshaw Goddard has hired structured finance partner Rachel Kelly from McDermott Will & Emery. Kelly has three decades of experience at major international law firms, including as a partner at both Clifford Chance and Macfarlanes. Her work has been across the full spectrum of structured finance and debt capital markets transactions, public and private, national and international, advising the full .......

    Market Moves 1 April 2020

  • CECL delayed

    EU banks await IFRS 9 relief

    The US Fed, the FDIC and the OCC last week approved an extension of the new credit loss accounting standard CECL until 2022. No equivalent action has been taken for IFRS 9 on the EU side, however.

    According to the US regulators’ joint statement, banking organisations that are required under US accounting standards to adopt CECL this year .......

    News 31 March 2020

  • Basel 3 implementation deferred

    Sector developments and company hires

    APAC fund launch
    Pierfront Capital Fund Management has been awarded its capital market services license for fund management by the Monetary Authority of Singapore. It has also announced the first close of the Keppel-Pierfront Private Credit Fund, which aims to provide debt solutions to corporates or projects predominantly in the real asset sectors of the Asia-Pacific region. Sponsored by Pierfront .......

    Market Moves 30 March 2020

  • Capacity constraints

    Covid-19 not yet posing solvency issues

    Government and central bank actions have kept both the financial system and the real economy afloat in the short-term, amid the coronavirus disruption. The severity of this crisis for company and household finances will depend on the length of the current outbreak and political will, however.

    According to Rabobank credit analysts: “Covid-19 is now an imminent issue for .......

    News Analysis 30 March 2020

  • Euro CLO coronavirus exposure mitigated

    Sector developments and company hires

    Euro CLO coronavirus exposure mitigated
    A portion (15%) of European CLO collateral is derived from the industries most vulnerable to the coronavirus pandemic, according to Moody’s. However, the agency says that the relatively few near-term maturities of affected issuers will help mitigate the negative impact.

    The European CLOs that Moody’s rates have a median exposure of 14.7% to the sectors most .......

    Market Moves 27 March 2020

  • PPIP call

    CRT and non-agency MBS still in need of purchasing power

    Non-agency MBS and CRT deals in particular are still in need of government support, according to securitised product research analysts at JPMorgan. They suggest it could come in the form of a Public Private Investment Programme (PPIP) similar to that introduced in 2009 to support MBS through combining Treasury and private capital to buy legacy assets.

    “While the .......

    News 27 March 2020
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