CMBS

  • Net negative

    GSE reform could have widespread impact

    Privatisation of Fannie Mae and Freddie Mac could have widespread negative consequences for the US RMBS and CMBS markets, as well as on availability of credit for the housing market. Encouraging private label issuance to step in as the GSEs scale back remains a significant challenge.

    Treasury Secretary designate, Steven Mnuchin, recently stated that Fannie Mae and Freddie Mac should .......

    News Analysis 19 January 2017

  • RFC issued on IO approach

    DBRS is requesting comment on its proposed stand-alone methodology for rating North American CMBS interest-only certificates issued via multi-borrower conduits, as well as agency, single-asset/single-borrower, CRE CLO and re-REMIC deals. It reflects a movement from rating these certificates using their position in the waterfall to rating the referenced notional amount to account for a decline in payments as the transaction .......

    News Round-up 18 January 2017

  • Euro secondary slow

    It's been slow start to the week so far for the European securitisation secondary markets.

    Participants look to have taken the opportunity of the US public holiday yesterday to catch their breath and there was little movement in terms of trading or levels. However, tone remains very strong across the board and volumes are likely to pick up as the .......

    SCIWire 17 January 2017

  • Multifamily drives delinquencies down

    Fitch reports that US CMBS delinquencies closed out 2016 at US$12.1bn, down 21% by balance from year-end 2015. The overall delinquency rate finished last year at 3.34%, up 5bp from the previous month but down 68bp from 4.02% one year ago, according to the agency's latest index results for the sector.

    The drop in delinquencies is primarily attributable to portfolio .......

    News Round-up 16 January 2017

  • Rare mod for 2014 loan

    The US$8.7m Black Gold Suites Hotel Portfolio loan, securitised in COMM 2014-UBS6, has been modified. The loan was sent to special servicing early last year.

    The modification provides some rate relief, under which the borrowers will pay 2% for the next few months, 3.5% for a year after that and 5.6% thereafter. The loan will also become an interest-only note.

    News Round-up 13 January 2017

  • CMBS defaults, delinquencies diverge

    The 12-month rolling loan maturity default rate for European CMBS rated by S&P increased from 21.8% to 22.2% in December. The overall senior loan delinquency rate decreased from 54.7% to 53.7%.

    The delinquency rate for continental European senior loans decreased from 67.9% to 67.1%. The rate for UK loans decreased from 34% to 32.7%.

    .......

    News Round-up 13 January 2017

  • Co-working exposure gauged

    Co-working is expected to play an increasingly significant role in commercial real estate, posing challenges to underwriting and valuation standards for the CMBS market. Morningstar Credit Ratings notes that while loans with exposure to co-working currently account for a small portion of the US CMBS universe, their share could rise as the business evolves.

    Co-working companies lease roughly 1.2 million .......

    News 13 January 2017

  • Sub debt raises CMBS defaults

    The more subordinate debt US CMBS senior loans carry, the more likely they are to default, especially for multifamily and retail properties, according to Fitch. In a recent analysis of over 24,000 CMBS 1.0 conduit loans issued between 2003 and 2008, approximately 1,000 (4%) had subordinated debt at the time of issuance and these were 60% more likely to default .......

    News Round-up 10 January 2017

  • CMBS pay-offs continue slide

    The percentage of US CMBS loans that paid off on their balloon date slid sharply in December to just 58.4%, says Trepp. The November level had been 66.8% and December's reading is the lowest level posted since July.

    The December total also undershoots the 12-month moving average, which is 66.2%. By loan count, rather than balance, 66.8% of loans paid .......

    News Round-up 10 January 2017

  • Euro secondary sporadic

    Activity remains sporadic across the European securitisation secondary market.

    ABS/MBS continues to be as quiet as it was into year-end with only a few flash BWICs and patchy bilateral trading in major names being seen over the past week. However, positive sentiment and pent-up demand mean that spreads remain flat to slightly narrower in the year so far.

    CLOs have .......

    SCIWire 10 January 2017

  • FVO purchases jump

    Fitch reports a significant increase in the number of defaulted US CMBS loan purchases through fair value options (FVOs) since it last examined such activity in 2011. In the five-year period beginning in 2012, 79 FVOs were exercised, versus the 11 FVOs exercised in the 10-year period that the agency previously studied from 2001 to 2011.

    Fitch found that the .......

    News Round-up 9 January 2017

  • Strong apartment NOI growth

    Moody's has updated its NOI index for properties backing CMBS conduit loans between 2004 and 2015. The US national all-property NOI composite index surpassed its 2008 peak in 2015 by 1.4%, largely driven by strong apartment performance.

    Apartment NOI rose 26% in the five years to end-2015. Core commercial NOI rose 3.1% and all core commercial property sectors, except suburban .......

    News Round-up 6 January 2017

  • Macy's, Sears closures affect CMBS

    Macy's has revealed a list of 68 stores that it will close in the near term, while Sears has announced it will close 150 Sears and K-Mart stores. There are CMBS implications for both.

    Of the 68 Macy's locations, 63 will be closed in early spring and two in mid-2017. There is CMBS exposure for 31 loans totalling US$3.4bn. Of this .......

    News 6 January 2017

  • CMBS credit metrics 'mixed'

    US conduit/fusion CMBS credit metrics were mostly steady in the final quarter of 2016, although S&P warns that credit enhancement levels are still too low. Over the entire year, there was some deterioration relative to 2013 and 2014.

    There were eight new collateral pools reviewed by S&P in 4Q16, with average DSCR of 1.75x compared to 1.8x in 3Q16. The .......

    News Round-up 6 January 2017

  • Student housing CMBS examined

    LTV and DSCR metrics weakened marginally for student housing loans securitised in new issue US CMBS in 2016, reports Kroll Bond Rating Agency. CMBS deals have also begun to include more student assets with only limited operating history, while a number of loans provide grounds for concern.

    The LTV ratio for student housing has increased for three consecutive years. Kroll .......

    News Round-up 6 January 2017

  • Issuance estimates revised upwards

    Most structured finance markets and their credit conditions seem favourable and in some cases ideal going into 2017, according to S&P's 2017 outlook. The agency has therefore increased its issuance forecast since October, projecting US$365bn-US$375bn total issuance for the US, with China expected to see the second largest issuance at an estimated US$140bn. The global total for 2017 is expected .......

    News Round-up 5 January 2017

  • Loss severities down

    US CMBS disposition volume last month dropped to US$595.3m across 54 loans, down from November's total of US$671m across 58 loans, according to Trepp. Overall loss severity for December fell by 13bp to 43.05%, due to several large retail notes that were resolved with very minor losses.

    Six conduit loans with a combined remaining balance of US$60m suffered losses of .......

    News Round-up 5 January 2017

  • CMBS delinquencies climb again

    The Trepp US CMBS delinquency rate hit its highest level in 14 months in December. The rate has increased in nine of the last 10 months and is now 5.23%, an increase of 20bp from November.

    Last year began with a 102bp drop in the delinquency rate over the first two months, but those early decreases have now been wiped .......

    News Round-up 4 January 2017

  • Law firm nabs SF vet

    Norton Rose Fulbright has hired Patrick Dolan as a partner to the firm, joining from Dechert. He focuses his practice on ABS and MBS - often with innovative structures - representing warehouse lenders, issuers, underwriters, investors and multi-seller commercial paper conduits. Dolan has worked on financings and securitisations of various asset types, including PACE bonds, tax liens, structured settlements, marketplace .......

    Job Swaps 4 January 2017

  • Firm acquires NPL portfolio

    Bain Capital Credit has acquired a €364m portfolio of Spanish non-performing loans. It comprises defaulted first lien Spanish loans to hotel operators, real estate developers, retail centres and residential real estate assets.

    Fabio Longo, md and head of Bain Capital Credit's European NPL and real estate business, says: "We continue to find Spain one of the most attractive markets in .......

    News Round-up 3 January 2017

  • Opus completes multifamily Freddie deal

    Opus Bank has securitised US$509m of its multifamily loans through a Freddie Mac-sponsored 'Q-deal' securitisation. One class of Freddie-guaranteed notes was issued and purchased by Opus.

    Opus says the deal is "a novel transaction that reduces Opus' commercial real estate concentration, lowers its risk weighted assets, increases its total risk-based capital ratio, lowers its loan-to-deposit ratio and improves its liquidity". .......

    News Round-up 3 January 2017
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