CMBS

  • Change afoot for Freddie K-series

    Losses on even the most recent Freddie Mac K-series CMBS notes are expected to be low, despite signs of weakening underwriting quality. There are also signs that issuance for the sector may have peaked in 2Q13, with higher rates and the FHFA mandate to reduce originations expected to drive volumes lower over the coming months.

    About US$22bn of multi-borrower deals .......

    News 23 October 2013

  • Cap rate impact examined

    With the bulk of US legacy CRE loans approaching their maturity dates, liquidity, capitalisation rate and interest rate dynamics will become increasingly important. KBRA has released a paper examining the impact that increasing cap rates may have on the ability to refinance performing fixed-rate CMBS loans over the next five years.

    Generally interest rates and cap rates move in tandem, .......

    News Round-up 22 October 2013

  • APAC upgrades outweigh downgrades

    Upgrades (accounting for 3.7% of total rating actions) outnumbered downgrades (1.8%) across Fitch-rated Asia-Pacific structured finance deals in 3Q13. The agency reports that most ratings were affirmed during the period.

    There were five upgrades in Australia and three in Japan. Of the Australian upgrades, four were for tranches from an unsecured consumer loan transaction and were due to better-than-expected asset .......

    News Round-up 21 October 2013

  • CMBS write-offs examined

    Trepp has published an analysis examining how much written-off US CMBS bonds received on average in the months before their balance is wiped out. Many tranches receive sizable cashflows from recovery of ASER amounts that flow through a deal's cashflow waterfall, paying back accumulated interest shortfalls along the way.

    To get a sense of what investors have been receiving from .......

    News Round-up 18 October 2013

  • Credit funds set for largest post-crisis inflow

    With concerns of a significant near-term taper by the US Fed removed, investors allocated the most to credit hedge fund strategies since August 2012, according to eVestment. The firm's hedge fund asset flow report for September shows that inflows to the sector surpassed US$60bn for the year in Q3, putting it on pace to see the largest annual inflow since .......

    News Round-up 18 October 2013

  • CMBS liquidations drop

    US CMBS loan liquidations totaled US$870m in September, relative to the 12-month moving average of US$1.26bn and 20% below the previous month's US$1.09bn, according to Trepp. Loss severities stood at 43.3% for the month, up from August's 40.9% but below the 12-month moving average of 43.99%.

    The number of loans liquidated in September was 92, resulting in US$376.78m in losses. .......

    News Round-up 18 October 2013

  • Theatre restructurings on the cards

    The main obstacle to a restructuring of the Theatre (Hospitals) No. 1 and No. 2 CMBS appears to have been removed. A short-term extension to 15 January 2014 has been agreed to by 50.1% of the class A noteholders in both transactions, to enable ongoing discussions in connection with a long-term solution.

    An earlier ruling regarding voting rights in the .......

    News 17 October 2013

  • RWN placements follow US rating action

    Fitch says it expects to take limited rating actions on US CMBS transactions as a result of its placement of the US sovereign rating on rating watch negative. Bonds in five deals are directly linked to the US rating and have already been placed on rating watch negative, while many others have exposure to defeased collateral and the US government .......

    News Round-up 17 October 2013

  • CMBS recovery rates examined

    A new Moody's analysis suggests that the shorter the time a US CMBS loan is in special servicing, the higher its recovery rate is. The study examines recovery rates in US$60.5bn outstanding CMBS transactions for each of the largest special servicers, dissecting the data by strategy, vintage, property type, year of liquidation and months to recovery.

    "For the first time, .......

    News Round-up 17 October 2013

  • Limited construction boosts CRE growth

    All US commercial real estate sectors continued to post moderate growth in 3Q13, which should continue into 2014 as the unemployment rate declines, according Moody's latest CMBS and CRE CDO surveillance review. As in the previous quarter, growth was helped by a limited amount of construction and positive absorption.

    Retail growth continued at a more moderate pace, but benefited from .......

    News Round-up 16 October 2013

  • EMEA downgrade trends discussed

    Fitch reports that asset underperformance was the dominant driver of EMEA structured finance (SF) downgrades since the onset of the credit crisis in 2007, accounting for 69% of negative rating actions. At the highest rating levels, asset underperformance is a far less dominant driver of rating downgrades, however.

    "This suggests that structured finance structures have operated as intended, with senior .......

    News Round-up 16 October 2013

  • Indicative information released on bulk sale

    Indicative information on geography, property type and outstanding loan balance has been disclosed by CBRE in connection with CWCapital Asset Management's forthcoming CRE liquidation (SCI 14 October). Based on this information, CMBS analysts at Barclays Capital have compiled a tentative list of the 67 assets out for the bid.

    They suggest that four CMBS deals account for 85% of all .......

    News Round-up 16 October 2013

  • EMC 3 to set precedent?

    An event of default has been declared for Victoria Funding (EMC III), in what is believed to be the first instance of balance sheet insolvency for a European CMBS. The move could set a precedent that expedites the resolution of a number of other transactions.

    The final property under the last remaining loan (Brisk) backing EMC 3 has been sold .......

    News 15 October 2013

  • Special servicer replaced

    The controlling party of Titan Europe 2007-2 has replaced Capita Asset Services with Mount Street Loan Solutions as special servicer for seven loans, representing 18.5% of the pool. Capita remains special servicer for the other loans backing the CMBS.

    Mount Street is now special servicer for the Cobalt (8.2% of pool), Skoduv Palace (5.5%), Six Hotels (1.6%), Toy Box (1.1%), .......

    News Round-up 15 October 2013

  • Reduction in sovereign ceiling proposed

    S&P has published a request for comment on proposed changes to its methodology for assigning ratings above a sovereign's foreign currency rating on single-jurisdiction structured finance transactions. The proposal is designed to bring additional clarity and comparability to the agency's global approach for considering structured finance ratings above that of the sovereign.

    The proposed criteria apply a rating differential above .......

    News Round-up 15 October 2013

  • Large European CRE JV announced

    AXA Real Estate Investment Managers and Norges Bank Investment Management have entered into a European commercial real estate loan co-investment programme. They will target investments in large senior loans with a primary focus on the UK, France and Germany.

    The partnership strengthens AXA Real Estate's position in the market and increases the size of individual real estate loans it can .......

    Job Swaps 15 October 2013

  • Commercial mortgage co sets up SF team

    Eastern Union Funding is forming a new structured finance division which will be led by Shaya Ackerman. He will work closely with underwriting director Dov Zabrowsky, who will serve as the group's senior analyst.

    .......

    Job Swaps 15 October 2013

  • EMEA CMBS RFC issued

    Moody's has issued a request for comment on changes to its approach to rating EMEA CMBS transactions. Proposed changes aim to introduce minimum yields to avoid strong fluctuations in Moody's property value assessment as a result of market yield volatility. Minimum yields will effectively cap the agency's value assessment for a given property cashflow, during peak market situations with low .......

    News Round-up 14 October 2013

  • Sears CMBS exposure discussed

    A new Morningstar report examines the CMBS exposure of Sears, given that the firm represents almost twice the square footage of J.C. Penney in terms of securitised properties. Sears Holdings has failed to produce top-line growth for eight consecutive years after merging with Kmart, having closed 68 of its Sears department stores and 125 of its Kmart stores since 2009.

    News Round-up 14 October 2013

  • Late-pays drop on REO dispositions

    US CMBS late-pays fell by 11bp in September to 6.57% from 6.68% a month earlier, driven by large REO dispositions, according to Fitch's latest index results for the sector. The drop was led by the liquidation of the Granite Run Mall loan, securitised in COMM 2006-C7 (see SCI's CMBS loan events database).

    Fitch expects CMBS delinquencies to continue .......

    News Round-up 14 October 2013

  • Second bulk CRE liquidation due

    Further details have emerged on CWCapital Asset Management's liquidation of US commercial real estate loan and REO assets (SCI 26 September). The firm is marketing - via CBRE and Auction.com - a US$2.57bn diversified portfolio of what it describes as trophy, core, core-plus and value-add strategic investments.

    Nearly two-thirds of the assets, as a percentage of unpaid balance, are secured .......

    News Round-up 14 October 2013
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