One unassailable fact is that securitisation has a hugely important role to play when it comes to financing commercial real estate (CRE). Simply put, no other source of CRE finance can provide the high level of openness and transparency that can be afforded by securitisation. Indeed, as demonstrated by the recent financial turbulence, the ability … Continue Reading
The tranching and splicing of debt secured by commercial real estate (CRE) is likely to become an increasingly important part of the CRE lending market as it begins to grapple with the sobering reality of a breaking wave of refinancings coupled with a serious deterioration in valuations.… Continue Reading
Wow, what a year 2022 has been! Typically when I reflect on all things structured CRE related, I have more often than not found myself applying a metaphor of a roller coaster, which is suitably apt given the huge swings in market activity experienced over the past twenty years or so. 2022 has proven to be … Continue Reading
In the wake of the Global Financial Crisis (GFC), highly structured CRE debt transactions featuring multiple lenders and including a securitisation received a lot of criticism. There are myriad of justifiable reasons for this, but the chief complaint generally centred around the fact that at times of distress and a need for urgent action to … Continue Reading
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 speaking … Continue Reading
Read time: 3 minutes It is fair to say that there is not only a lot excitement about the arrival of CRE CLO technology in Europe, but also a heightened level of interest when it comes to some of the structural features that this new asset class could embrace. In this vein, it is fair … Continue Reading
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 … Continue Reading
Read time: 2 minutes When speaking to market participants about the intricacies and benefits of CRE CLO technology, more frequently than not the first point that I have found myself explaining is the difference between a CRE CLO and CMBS. It is certainly a fair question, as ostensibly both products are the same given that … Continue Reading
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, … Continue Reading
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 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 … 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
This summer, fans of the non-performing loan (NPL) circus, are in for a treat with the launch of the Italian tightrope trick. Spurred on by the recent European Banking Authority stress tests, the news last week that Banca Popolare di Bari will become the first bank to utilise the Italian state guarantee scheme and deploy securitisation … 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
