Updates and analysis on current issues and topics faced by our structured finance lawyers
Estimated reading time: 5 minutes
If the latest forecasts are true, then we will imminently be subjected to a long and deep recession and therefore now is the opportune time to draw comparisons against previous downturns and lessons learned. Indeed, given the nature of these beasts, there is always a chief protagonist or metaphorically…
Read time: 4 minutes
For the erstwhile market observer, when you compare CMBS 2.0 against the backdrop of the pre Global Financial Crisis (GFC) crop of deals, one resounding observation is that the latter had a significant number of so called “conduit” deals, where transactions featuring eight or more loans were in plentiful supply. This…
Read time: 1 minute 20 seconds
There’s no doubt that 2021 was an outstanding year for European structured CRE credit activity. And as attention turns to 2022, the scene is clearly set for it to be the most exciting, innovative and ground-breaking year since CMBS broke onto the European scene in the early noughties.
Truly,…
Read time: 3 minutes
2021 is so far proving to be a stellar year for European CMBS, and if the current momentum continues 2021 will go down as a truly bumper year for the product. Like many other financial transactions, despite a promising start to 2020, CMBS certainly ended up having a torrid ride on…
Read time: 3 minutes 50 seconds
Fourteen years ago this September, I distinctly recall attending a conference hosted by the European CMSA that was focussed on the advent of CRE CDO’s. At the time, the emergence of these structures was seen as an extremely exciting development as it marked a natural progression for the maturing…
Whether you are a supporter of using CMBS to finance commercial real estate or not, the simple fact is that it provides an efficient mechanism to transfer commercial real estate loan risk away from the banking sector, whilst at the same time providing much needed transparency to the commercial real estate lending market. In light…
Read time: 2 minutes 20 seconds
The economic fallout of COVID-19 will be hugely significant for the European CMBS market, as a perfect testing environment has been created to truly examine the resilience and robustness of CMBS 2.0. Indeed, the impact of COVID-19 will be a true litmus test as to whether those structural reforms…
Read time: 3 minutes 30 seconds
When it comes to the nuts and bolts of commercial mortgage-backed securities (CMBS), one of the key features that will be at the very forefront of any Arranger’s mind will be the mechanism by which ‘excess spread’ (i.e., the positive difference between amounts received on the underlying loans and the liabilities of the issuer – or, in other words, profits) is not only extracted from structures in an efficient manner, but also in such a way as to maximise returns. Although this is a standard feature for CMBS, a review of recent transactions reveals a high degree of variance in extraction structures across deals.
Continue Reading CMBS 2.0 – Class X – variety is not always the spice of life
As was the case prior to the global financial crisis, the current driver for all new European CMBS deals stems from the adoption by investment banks of the originate-to-distribute business model for financing commercial real estate assets. This trend is showing no sign of abating in the CMBS 2.0 era. Although this is a proven and effective mechanism for producing much needed CMBS product, it is important for market participants to be aware that these conduit deals are not the only CMBS structures in the market and that agency deals could potentially be an invaluable tool for any sophisticated borrower that is looking to directly tap the capital markets to raise cheaper finance.
Continue Reading Agency CMBS – is now the time for borrowers to capitalise?
Read time: 2 minutes 29 seconds
As industry participants head off on their festive breaks, there will be a level of euphoria that despite unfavourable regulation, political uncertainty as well as a very cautious macro-economic outlook, the European CMBS industry has successfully not only avoided succumbing to many potential market pitfalls but when you take into account the volume of issuance as well as the heterogeneity of the deals that have graced the market, then 2019 can be said to be a positively booming year for the product.
Continue Reading BOOM, BOOM, BOOM – CMBS IS SHAKING THE ROOM
