CMBS

  • Mall sentiment eyed

    The price of CBL & Associates Properties' stock moved higher over the course of August, while the Markit CMBX.BB.6 index moved lower, marking the first time this year that the two have disconnected. Morgan Stanley CMBS strategists believe this disconnect may present an opportunity and suggest three different trades through which to capitalise on it.

    "The debt markets are pricing .......

    News 6 September 2016

  • Euro secondary stays positive

    The positive tone continues across the European securitisation secondary market.

    Although the US public holiday has hampered activity so far this month, secondary spreads across European ABS/MBS and CLOs have continued to edge in since 1 September. UK non-conforming paper continues to lead the way boosted by the dearth of primary supply and the upcoming Aire Valley refinancing, combined with the .......

    SCIWire 6 September 2016

  • Delinquencies reverse course

    The Trepp CMBS delinquency rate reversed course in August and dropped for the first time since February. The US CMBS delinquency rate now stands at 4.68%, a decrease of 8bp from July.

    The rate is 77bp lower than the year-ago level and 49bp lower since the beginning of the year. The multi-year low of 4.15% was reached in February 2016 .......

    News Round-up 5 September 2016

  • FRESB loan transferred

    The first significant credit issue to hit a FRESB CMBS occurred last month. The US$3.1m Park Place Apartments loan, securitised in FRESB 2016-SB17, became one-month delinquent and transferred to special servicing.

    Backed by an Elk City, Oklahoma property built in 1985, the loan was originated by Hunt Mortgage in April 2016, according to Wells Fargo structured product analysts. Per the .......

    News Round-up 5 September 2016

  • CMBS defaults anticipated

    More than a quarter of current US non-agency CMBS loans maturing through year-end 2017 will face difficulty refinancing, says Kroll Bond Rating Agency. A spike in maturity defaults is expected in 2Q17.

    KBRA believes 26.1% (US$33.4bn) of loans maturing through year-end 2017 will face difficulty refinancing, based on an analysis of 8,590 current non-agency CMBS loans totalling US$128.2bn with maturity .......

    News 1 September 2016

  • Office Depot closures analysed

    Office Depot's announced plans to shut down 300 stores over the next three years has elevated the risk on US$956.6m in mortgages tied to CMBS, says Morningstar Credit Ratings. The riskiest loans are those with leases expiring before the end of 2018, with either a DSCR below 1.2x or a collateral vacancy rate that falls below 80% if Office Depot were .......

    News Round-up 1 September 2016

  • Dispositions inch up

    August US CMBS disposition volume inched up slightly from July and came in above the six-month average of US$641.6m. Trepp reports that 71 loans totalling US$722.5m were disposed of in August, compared to US$681m in July and US$809.3m in June. Average loan size continues to hover slightly above single digits at US$10.2m.

    Including six smaller loans with a remaining balance .......

    News Round-up 1 September 2016

  • ITT default risk highlighted

    The US Department of Education's recent action against ITT Educational Services may increase default risk for US$123.1m in CMBS with exposure to the company, according to Morningstar Credit Ratings. In a move that may force ITT to cease operations, the Department announced on 25 August that it has banned the for-profit educational provider from enrolling new students that use federal .......

    News Round-up 30 August 2016

  • Multi-borrower NOI up

    Net operating income (NOI) for properties within Fitch-rated US multi-borrower CMBS increased by 3% year-over-year in 2015. This compares to 3.2% of NOI growth in 2014, 2.5% in 2013 and 2.5% in 2012.

    Year-over-year NOI increases for the major property types from 2014 to 2015 were: 5.4% for multifamily (compared to 3.8% from 2013 to 2014); 5.1% for hotel (8.1%); .......

    News Round-up 30 August 2016

  • US CMBS loss severities drop

    US CMBS loan losses fell below the historical weighted average loss severity during 2Q16, notes Moody's. The weighted average loss severity was 41.3% for the 229 loans liquidated during the quarter, down from 49.3% for the 139 loans liquidated in 1Q16 and also down from the historical weighted average of 42.8% for loans liquidated between 1 January 2000 and 30 .......

    News Round-up 30 August 2016

  • Mall CMBS performance varies

    The ability of shopping malls to retain tenants varies widely, with the recent wave of department store closures (SCI passim) and growth of online shopping exacerbating the gap between successful and unsuccessful centres. Moody's notes that these factors in turn affect the performance of loans backed by malls within CMBS transactions.

    As most mall loans within CMBS are structured with 10-year .......

    News Round-up 26 August 2016

  • Negative rate warning for CMBS

    Moody's says that negative interest rates could be damaging for all European CMBS, but particularly for legacy and pre-2015 vintages. The agency explains that CMBS 1.0 and 2.0 transactions issued before 2015 have fewer protections against the excess spread erosion that results from negative rates.

    "CMBS 1.0 and pre-2015 CMBS 2.0 deals do not have contractual interest rate floors. Instead, they allow .......

    News Round-up 25 August 2016

  • 'Quick' pay-offs reviewed

    The large volume of maturing US CMBS loans in 2016 and 2017 has sparked concern about the transfer of loans to special servicing at or near maturity, only for these loans to quickly pay off. Fitch reviewed 2016 special servicing transfers through mid-July and observed that approximately 20% of loans transferred for maturity-related default paid off within 120 days, with .......

    News Round-up 22 August 2016

  • CMBS maturity pay-offs expected

    A majority of US CMBS loans that mature during the refinancing wave are likely to pay off, according the Moody's. The agency notes that property prices are now higher and interest rates lower as opposed to when they were aggressively underwritten a decade ago.

    "The financial metrics of more than two-thirds of maturing CMBS loans indicate a high probability of .......

    News Round-up 18 August 2016

  • At-risk Macy's eyed

    About US$3.64bn in loans securitised in CMBS issued since 2010 could be impaired by Macy's recently announced round of store closures, according to Morningstar Credit Ratings. The agency has identified 28 Macy's locations that reported below-average tenant sales and are the most at risk of closing.

    The retailer said last week that it plans to shutter an additional 100 stores .......

    News Round-up 18 August 2016

  • Retention span

    CMBS compliance window closing

    The race to originate and structure US CMBS is reaching a critical stage, with the implementation of risk retention rules just over four months away. The recent issuance of the US$870.6m WFCM 2016-BNK1 kick-started a new era for the asset class, marking the first retention-compliant deal and precipitating a positive market reaction.

    WFCM 2016-BNK1 sees sponsors Wells Fargo, Bank of .......

    News Analysis 18 August 2016

  • CMBS trader charged for loan fraud

    The US SEC has charged former CMBS trader Tianyu Zhou with inaccurately marking certain loans held on his employer's books prior to securitisation. Zhou has agreed to settle the SEC's charges, while his former firm - Deutsche Bank - was not charged as it cooperated with the SEC's investigation.

    The SEC says that Zhou - who worked at his firm from 2012 .......

    Job Swaps 16 August 2016

  • Executive director tapped

    The CRE Finance Council has named Lisa Pendergast executive director. The association says this latest appointment is a significant step in the restructuring of its management team, following the hire of Michael Flood as deputy executive director (SCI 11 May).

    Pendergast brings to CREFC 25 years of industry experience in structured finance markets. Most recently, she was md and head .......

    Job Swaps 15 August 2016

  • Delinquencies inch up

    US CMBS delinquencies increased by 2bp in July to 3.20% from 3.18% a month earlier, according to Fitch's latest index results for the sector. The portfolio run-off of US$7.6bn exceeded Fitch-rated new issuance volume of US$4.1bn from four transactions in June, causing a decrease in the overall index denominator.

    In terms of loan count, 76 loans were resolved in July, .......

    News Round-up 15 August 2016

  • CMLS 2014-1 affirmed after wildfires

    Fitch has affirmed all rated tranches of Canadian CMBS CMLS Issuer Corp series 2014-1, including the class G notes, which have been removed from rating watch negative. The rating action reflects the overall stable performance of the pool, in addition to the Clearwater Suites property becoming fully operational after the Fort McMurray, Alberta area was evacuated due to wildfires in .......

    News Round-up 12 August 2016

  • Euro default rate up

    The 12-month rolling loan maturity default rate for the European CMBS in S&P's rated universe increased to 11.9% from 7.3% at the end of July. The delinquency rate for continental European senior loans increased to 59.6% from 58.4%, while the rate for the UK increased to 21.8% from 19.6%. Overall, the senior loan delinquency rate increased to 46.1% from 44.6%.

    .......

    News Round-up 12 August 2016
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