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 … Continue Reading
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 … Continue Reading
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 … Continue Reading
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 … Continue Reading
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 … Continue Reading
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 … Continue Reading
Read time: 2 minutes 45 seconds Thus far CMBS has had a storming year and all current indicators point towards 2018 being a bumper year for the product. After two years of relative malaise on the primary issuance front, the first half of 2018 has proven to be anything but sluggish. Notable transactions that have … Continue Reading
Read time: 2 minutes 15 seconds Rather like the Hans Christian Anderson story about the little match girl, the news that BAML has successfully launched two CMBS deals in quick succession has flickered light into an otherwise cold and beleaguered primary issuance market. Not only do these transactions provide a clear indicator that there is … Continue Reading
Fuelled by continued macro-economic uncertainty, the European CMBS market is currently experiencing a prolonged period of malaise. Meanwhile the Italian legislative cogs have continued to turn. The news last week that the Italian government has finally approved a decree on NPL securitisations, which comes hot off the heels of the proposals to establish a private … Continue Reading
Almost a year ago to the day, I posted a blog questioning whether CMBS was the answer to Italian bank deleveraging woes. One year on, I am pleased to say that the Italian government (clearly channelling me!) has just reached an agreement with the European Commission to provide for a guarantee mechanism for the securitisation … Continue Reading
Earlier this month I set out my CMBS predictions for 2016 in the Investment Adviser (Broadening the scope of CMBS loan issuance), where I predicted that macro-economic conditions would continue to challenge the re-establishment of CMBS as financing tool for European commercial real estate (CRE). Indeed, the first few weeks of the year have done … Continue Reading
Given that it is coming up to a year since I posted a blog (CMBS – it’s time to dance to the beat!) in which I surmised that “I don’t just want to see CMBS hit the dance floor – I want to see it win a contest!”, now would seem an opportune time to … Continue Reading
The European CMBS 2.0 market was launched in June 2011 and in the years that have since followed, twenty four public rated deals have so far hit the market. Given that only seven of these deals have featured multiple loans and the smallest loan securitised prior to November 2015 had a balance of €55 million, … Continue Reading
The recent below par pricing of two Goldman Sachs arranged CMBS deals demonstrate the potential perils of CMBS as a distribution tool for CRE debt. Indeed, these two deals bring into stark focus the pricing quandary that currently confront many conduit lenders. On the one hand, lenders are having to competitively price loans in a … Continue Reading
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 with twenty of the twenty … Continue Reading
In the second of a series of blogs, in which we address the evolution of CMBS structural features, we will consider the most (arguably) integral form of credit enhancement for any CMBS deal, the liquidity facility. Liquidity facilities are structured as 364 day committed revolving credit lines that can be drawn by a CMBS issuer … Continue Reading