If you thought the wrangling over special servicer replacements was over following Richard Snowden QC’s judgment in US Bank v Titan Europe 2007-1 (NHP) plc in April last year, think again.
Ever since Fitch issued their press release confirming that as a matter of policy it would not provide rating agency confirmations (RACs) in relation
So it’s been just over a year since Fitch issued their press release confirming that as a matter of policy it would not provide rating agency confirmations (RACs) during the replacement of special servicers on EMEA CMBS transactions and indeed, just over a year since our last blog on the matter, entitled “What the Fitch??!”.
At the end of that blog we observed that it was going to be a fun year for CMBS – and wasn’t it just.
Continue Reading Clash of the Titan 2007-1
Last week’s new Debussy DTC/Toys’R’Us CMBS transaction , which we were happily involved in, has sparked media attention as a sign of recovery of investors’ faith in the European securitisation markets. It also demonstrated investor demands to address some of the structural issues that had arisen in the original Vanwall securitisation as well as other legacy CMBS transactions.
This new CMBS incorporates many of the features based on a set of guidelines drawn up by banks and funds to govern new European CMBS transactions (although it should be noted these are separate from the guidelines drafted by Commercial Real Estate Finance Council’s CMBS 2.0).
Continue Reading Playing with New Toys: How investor guidelines are shaping new CMBS transactions
As some of you may have seen, Fitch helpfully issued a press release last week clarifying its position on providing rating agency confirmations (RACs) during the replacement of special servicers on EMEA CMBS transactions. Rather unhelpfully, however, the release stated they would not be providing any such RACs in the future. This policy, of course, applies to the very transactions that Fitch rated (in the majority of cases) at inception which contained (presumably, either at Fitch’s request or at the very least with their knowledge) the requirement that such RACs be obtained from the relevant rating agencies before any transfer of the special servicer function could occur.
The right to replace the special servicer of a particular loan in a CMBS transaction typically lies with party that is exposed to the first loss position in relation to that loan i.e. either the B-piece lender or the lowest ranked class of noteholders (usually labelled the ‘controlling party’ or ‘controlling class’). Such controlling party or controlling class therefore has a strong economic incentive to ensure that the maximum recovery from the loan is achieved by the special servicer.
Continue Reading What the Fitch??!