CMBS

  • Euro markets unexpectedly busy

    Weakness in the broader financial markets brought volatility to the European ABS sector last week. An unseasonably high number of ABS bid-lists were observed, while activity is building in RMBS and the focus on CMBS has been on the unexpected postponement of a new issue.

    "The last week and a half has seen activity picking up strongly. It was quiet .......

    Market Reports 13 August 2014

  • Workout fees accrue on defeased loan

    The US$50m Ridgeview Apartments loan - securitised in DBUBS 2011-LC2A - was fully defeased in June, but workout fees continue to accrue. Morgan Stanley CMBS strategists note that this is due to a prior technical modification.

    The servicer on the transaction issued a default notice in March 2012, after the borrower refused to use the lockbox under the current terms .......

    News Round-up 13 August 2014

  • CMBS 2.0 take-outs continue

    The lending environment remains strong for CRE and take out activity continues to be seen in CMBS 2.0 collateral, says Fitch. Some early payoffs are taking place shortly after expiration of the lock-out period, with borrowers paying the premium of yield maintenance to take advantage of the persistent low interest rate environment.

    Cash-outs raise the question of sustainability, although prepay .......

    News Round-up 11 August 2014

  • Volatility weighs on hedge fund performance

    Aggregate hedge fund performance was negative at -0.35% in July, the industry's fourth down month of 2014, according to eVestment. The losses pushed year-to-date returns down to 2.62%, as Europe re-emerging as a source of instability, escalating tensions in eastern Ukraine and conflict in the Middle East all weighed on investor preference for risk assets.

    In particular, a sell-off in .......

    News Round-up 8 August 2014

  • Japanese credit quality correlations examined

    Japanese structured finance credit performance and fundamentals have generally remained stable for the past couple of years. However, transaction-specific risks and certain macroeconomic elements remain key factors with the greatest potential to undermine this stability, according to S&P.

    The agency says the top-five macroeconomic factors that have been leading indicators of the credit quality of Japanese structured finance deals in .......

    News Round-up 8 August 2014

  • CMBS supply stays high

    US CMBS bid-list supply remained strong yesterday at around US$478m, with generic spreads wider across most vintages and product types. SCI's PriceABS data recorded 45 unique US CMBS tranches out for the bid during the session, including paper issued as recently as last month.

    The tranche in question is HILT 2014-ORL A, which was talked at .......

    Market Reports 8 August 2014

  • Innovative workout for Apple loan

    Hatfield Philips International has successfully implemented a workout strategy and restructuring of the €225m Apple loan, securitised in the Talisman 6 Finance CMBS (see SCI's CMBS loan events database). As part of the restructuring, the parent companies of the borrowers consensually agreed to transfer their shares in the borrowers to two newly-founded independent Irish holding companies.

    Originated in .......

    News Round-up 7 August 2014

  • Smaller agencies gain market share

    The use of smaller rating agencies has become more common for US CMBS 3.0 deals, particularly as Moody's, S&P and Fitch have tightened their criteria in response to perceived weakening in credit quality. The move could potentially limit liquidity on these bonds if some investment mandates still require investment grade ratings from one of the top three agencies, according to .......

    News 5 August 2014

  • Credit benefits

    Reach for yield outweighs macroeconomic concerns

    The US credit markets enjoyed a positive first half, with some sectors seeing returns in the high single-digits due to consistent spread tightening and rate compression. The strongest performing segments were those with exposure to interest rate duration.

    "Credit has benefited from several helpful trends: accommodative central bank policy, low default rates and benign treasury rates," confirms Chris Acito, ceo .......

    News Analysis 5 August 2014

  • Auctions exposed to LNR assets

    US$589m of allocated balance from US$775m in US CMBS loans is set to be sold via Auction.com in late August and early September. Three deals have a high concentration of loans out for bid and the properties appear to be exclusively specially serviced by LNR, according to Barclays Capital data.

    The COMM 2006-C8 deal has the largest exposure to the auctions, .......

    News Round-up 4 August 2014

  • CMBS 2.0 defeasance emerging

    Fitch says it has provided rating confirmations for 26 defeased loans in US CMBS thus far in 2014, three of which were from CMBS 2.0 transactions that occurred in July. Two others were in 2011 transactions and another in a 2010 transaction. Each of the loans has five-year terms.

    The appearance of 2.0 requests marks the beginning of an expected .......

    News Round-up 4 August 2014

  • Specially serviced loans decrease

    The accelerating US economic recovery led to a further decline in CMBS delinquency rates and a decrease in the share of loans in special servicing, according to Moody's 2Q14 surveillance review. The agency's base expected loss for conduit/fusion transactions fell to 8.2% during the quarter from 8.6% in Q1.

    "The improving economy contributed to the decline in Moody's base expected .......

    News Round-up 1 August 2014

  • CMBS credit metrics slide again

    Leverage and other key metrics for US CMBS slipped again in Q2, driving credit enhancement levels for new deals higher still, according to Fitch's latest quarterly index report on the sector. Average triple-A CE for Fitch-rated transactions rose to 24% during the quarter, up by 1.125 percentage points from the prior quarter and 2.375 percentage points from one year ago. .......

    News Round-up 1 August 2014

  • Loss severity ticks up

    The US$82.9m Babcock & Brown FX 2 loan last month liquidated with a 95% loss, after being delinquent for more than two years (see SCI's loan events database). Coupled with low volume, Trepp notes that this large loss contributed to an up-tick in aggregate loss severity, which jumped from 45.32% in June to 60.80% in July.

    Liquidated loan .......

    News Round-up 1 August 2014

  • First loss for FREMF programme

    The US$3.7m Green Meadows Apartment loan - securitised in FREMF 2010-K6 - has been liquidated at a realised loss to the trust of US$374,943, representing a loss severity of approximately 10%. CMBS strategists at Morgan Stanley believe that this is the first loan securitised across any FREMF CMBS to realise a loss.

    According to special servicer commentary, the property was .......

    News Round-up 1 August 2014

  • Loan resolutions slow

    The US CMBS delinquency rate dropped by just 1bp to 6.04% in July, according to Trepp. Loan resolutions totalled only US$600m during the month: with fewer distressed loans removed from the delinquent loan pool, newly delinquent loans pushed the monthly total back up. Trepp currently counts US$32.1bn in delinquent CMBS loans, which is down from June's total.

    "After so many .......

    News Round-up 31 July 2014

  • Methodology guidelines finalised

    Scope Ratings has finalised its methodology guidelines for rating and monitoring structured finance instruments, taking into account market comments and other feedback following the publication of a draft proposal. These guidelines provide the general framework for the development of in-depth methodologies. Scope plans to issue subsequent addenda to these guidelines in order to define its specific assumptions for rating structured .......

    News Round-up 31 July 2014

  • CMBX differential 'too wide'

    Markit CMBX.6.BB reference obligation spreads have tightened by 135bp since the beginning of the year, while the index itself tightened by about half that. Consequently, the CMBS cash/synthetic basis has widened by over 70bp during that period and is now at its widest level since October 2013, according to Bank of America Merrill Lynch figures. The basis has widened by .......

    News Round-up 30 July 2014

  • CMBS leverage on track to match peak

    US conduit CMBS loan leverage is now growing at such a pace that by 2017 it will have returned to its 2007 peak, according to Moody's. Loan underwriting standards continue to loosen, with Moody's loan-to-value (MLTV) ratios for conduit loans now on track to match the peak of 118% MLTV, set almost exactly ten years ago.

    "We've been raising credit .......

    News Round-up 30 July 2014

  • Freddie debuts unusual CMBS

    Freddie Mac priced what is believed to be a first-of-a-kind CMBS last month. The US$393m FREMF 2014-KX01 comprised 20 loans that were removed from previous securitisation pools by Freddie Mac or at the request of a B-piece buyer.

    The transaction features a two-tranche structure consisting of US$334m class A notes (guaranteed by Freddie Mac) and US$59m class B notes (not .......

    News Round-up 30 July 2014

  • Real estate investment leader added

    Strategic Partners Fund Solutions has appointed Mark Burton to lead it real estate secondaries practice. He will serve as a principal and oversee the firm's secondary real estate investment activities.

    Burton joins from H/2 Capital Partners, where he focussed on distressed commercial mortgage opportunities. Before that he spent 11 years at Goldman Sachs, overseeing domestic CRE investing and lending.

    .......

    Job Swaps 29 July 2014
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