CMBS

  • Heavy retail concentrations seen

    KBRA notes in its November month-in-review report that the steady supply of retail loans has been a consistent theme in US CMBS 2.0/3.0 deals. The agency observed heavy retail concentrations in each of the three conduit transactions it rated last month, ranging from 30.6% to 55.4%, with an average of 45%.

    This is well above the average retail concentration among .......

    News Round-up 16 December 2013

  • CRA debuts SF approach

    Scope has published its first methodology guidelines for rating and monitoring structured finance products. The guidelines lay down the key principals that the rating agency intends to apply to all types of structured finance instruments and present how key criteria are integrated in the rating process.

    Scope believes that the analysis of qualitative factors, based on objective components, plays a .......

    News Round-up 16 December 2013

  • Large dispositions drive late-pays lower

    US CMBS late-pays fell by 22bp in November to 6.10% from 6.32% a month earlier, according to the latest index results from Fitch. The drop was led by four large dispositions.

    The largest disposition was the note sale of the original US$190m StratReal Industrial Portfolio I loan (securitised in BACM 2007-1) via a fair-value purchase option (see SCI's CMBS loan .......

    News Round-up 16 December 2013

  • Excess proceeds for REO loan

    In an unusual outcome for an REO loan, the Astor Crowne Plaza asset has paid off significantly above par. The US$73.4m loan, securitised in GSMS 2005-GG4, was sold this month for US$116.6m - slightly above its most recent appraisal, as of August.

    The property had been transferred to special servicing in May 2009 and was subsequently placed in REO. The .......

    News Round-up 16 December 2013

  • Weaker credit warning

    Fitch says it recently provided preliminary feedback on several US CMBS that included a higher percentage of loans from new originators. While these loans may not raise a red flag when measured simply by DSCR and LTV, other factors - including property locations, sponsors' experience levels and histories, and esoteric or unusual property types - showed these loans to be .......

    News Round-up 13 December 2013

  • CMBS surveillance criteria tweaked

    Fitch has updated its US fixed rate multi-borrower CMBS surveillance and Re-REMIC criteria.

    Under the changes, loss severity for the performing loan stress was increased to 50% (from 45%) to more closely reflect recent experience. This change is expected to increase overall transaction level loss severities slightly, but is not expected to have a significant rating impact.

    Additionally, the deterministic .......

    News Round-up 12 December 2013

  • CMBS outlook 'moderately positive'

    While the US CMBS market has benefited from low interest rates, better access to capital and the recovery in property fundamentals, S&P warns that several economic risks remain. The rating agency predicts GDP growth of 2.6% and has a moderately positive 12-month outlook for CMBS.

    Average credit metrics such as LTV ratios, percentage of interest-only loans and deal diversity have .......

    News Round-up 11 December 2013

  • US CMBS inches wider

    US CMBS spreads inched wider yesterday as bid-list supply came in at around US$200m. SCI's PriceABS data recorded several covers from the session, with a range of vintages from 2004 to 2013 represented.

    Several odd-lots circulated during the session split between legacy names and CMBS 3.0 bonds, with legacy super seniors ending the day about 1bp wider, according .......

    Market Reports 11 December 2013

  • Major market recovery boosts CRE prices

    The recovery in major markets boosted the recovery in national commercial real estate prices to within 11% of the December 2007 peak, according to the latest Moody's/RCA CPPI report. Major markets recouped roughly 95% of their peak-to-trough decline, while national prices have recovered almost 75% of their peak-to-trough decline. Non-major markets recouped around 56% of their losses.

    The national all-property .......

    News Round-up 11 December 2013

  • Top trades touted

    Morgan Stanley suggests in its global securitised products outlook for 2014 that the market is on the verge of a major transition from being liquidity-driven to being growth-dependent. While the returns are more modest in this scenario than they have been in the past, strategists at the bank believe that alpha opportunities within the sector remain more significant, scalable and .......

    News 11 December 2013

  • Defeasance activity accelerating

    US CMBS defeasance activity accelerated to US$10.1bn by end-November - a 140% jump over the same period a year ago, according to Commercial Real Estate Finance Council (CREFC). The association suggests that this is due to multiple factors, including concern about increased rate volatility, the ongoing stabilisation of property values and the coming expectation of loan maturities.

    Many borrowers appear .......

    News Round-up 10 December 2013

  • Strong results seen for MBS funds

    Hedge fund returns rose by an average of 1.1% in November, boosting average year-to-date returns to 8.2%, according to the latest eVestment figures. On an annualised basis the industry is on pace to return 9% for the year, nearly 150bp ahead of 2012's 7.5% increase.

    With a 0.35% return, credit strategies lagged the industry's average returns in November, weighed down .......

    News Round-up 10 December 2013

  • CMBS pro becomes real estate head

    Christian Janssen has joined Henderson Global Investors in London as head of real estate debt. He was previously co-head of commercial real estate lending at Renshaw Bay.

    Janssen has also served as chairman of CREFC Europe and as head of CRE DCM for Europe at Jefferies. He has worked at Barclays Capital in London, Morgan Stanley in London and New .......

    Job Swaps 10 December 2013

  • CMBS surprises in store?

    Deutsche Bank CRE debt research analysts forecast that five scenarios could surprise the US CMBS market next year. These predictions are set against a backdrop of increased investor focus and improving performance across the sector, albeit with potentially disappointing absolute returns.

    The first surprise is the return of multi-billion dollar conduit CMBS, with the number of loans in each deal .......

    News 9 December 2013

  • Smaller balance loan transfers rise

    Fitch reports that smaller balance US CMBS loans are increasingly transferring to special servicing. So far this year, 647 loans in the agency's rated universe transferred to special servicing - approximately 100 more than for the same period last year, but by dollar volume the number has declined considerably (US$15.8bn YTD November 2012 versus US$7.5bn in 2013).

    Most transfers to .......

    News Round-up 9 December 2013

  • CMBS loss severities dip

    The weighted average loss severity for all loans backing US CMBS that liquidated at a loss was 41% in 3Q13, down from 41.5% in the previous quarter, according to Moody's. The weighted average loss severity for all liquidated loans excluding those with losses of less than 2% was 52.7%, down from 53.5% in the previous quarter. Loans with losses of .......

    News Round-up 6 December 2013

  • Pay-off percentage hits highs

    The percentage of US CMBS loans paying off on their balloon date hit 81.3% in November, the second highest rate since Trepp began tracking the number in August 2008. The highest reading was 84.9% in December 2008.

    The November pay-off percentage is well above the 12-month moving average of 66.1%. By loan count as opposed to balance, 79.1% of loans .......

    News Round-up 6 December 2013

  • Multifamily CMBS origination trending up

    Kroll Bond Rating Agency expects the US multifamily CMBS sector to continue benefitting from household formation and low homeownership. As long as multifamily fundamentals continue to outperform the rest of the commercial real estate market, both investors and lenders will feel comfortable expanding their allocations to the sector, the agency suggests.

    On the lending front, this trend has been evident .......

    News Round-up 6 December 2013

  • Minimal Euro default rate underlined

    Only 1.5% by original issuance volume of European structured finance notes outstanding in mid-2007 had defaulted by end-3Q13, according to S&P's latest quarterly transition study. The quarterly transition study analyses cumulative rating transitions and defaults from the beginning of the financial downturn - which is assumed to be mid-2007 - until end 3Q13, aggregating by issuance volume.

    "The 12-month rolling .......

    News Round-up 6 December 2013

  • CMBS unresolved

    Euro CMBS questions unanswered as maturities loom

    S&P announced this week that over €10bn of loans backing European CMBS transactions that it rates could need refinancing next year (SCI 3 December). About €3bn of the €13bn of loans scheduled to mature in 2014 has been prepaid, with sizable question marks hanging over many of the transactions that are approaching maturity.

    Although loan maturities will continue to come .......

    News Analysis 6 December 2013

  • CRE CDOs tipped for growth

    US CMBS financing will expand on 2013 levels, according to Fitch's 2014 Outlook report for the sector.

    The agency notes that mortgage interest rates have increased rapidly from their early 2013 lows and, while the outlook on interest rates is largely benign in 2014, the expectation is that they will continue to rise slowly. That may impact the ability of .......

    News Round-up 5 December 2013
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