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CMBS
Economic Emergency Stabilization Act of 2008
The White House and Congressional Leaders finalized the Bailout Bill: Current draft of the Economic Emergency Stabilization Act of 2008. (from the Wall Street Journal) It will be interesting to see how it progresses through the House and Senate. I expect to see a lot of salesmanship as politicians try to weave into their current [...]
Rev. Proc. 2008-28 and Foreclosure Relief for Securitizations
The Internal Revenue Service issued Revenue Procedure 2008-28 [.PDF ] which provides for the modification of certain mortgage loans will not jeopardize the favorable tax treatment of the capital structure for certain securitization capital structures. One issue impacting the downturn in the real estate market is the inability of some lenders to revise the loan [...]
Banks Are Keeping More Loans on Their Books
Mark Gongloff reports in WSJ.com that U.S. commercial banks are keeping more of the loans they make on their balance sheets. Total assets at U.S. commercial banks swelled to $11.12 trillion in early April, up from $9.94 trillion a year ago, according to Federal Reserve data that are updated every Friday. Last month, the growth [...]
The Case for Exotic Notes in Commercial Real Estate Transactions
Fran Mastroianni of Goodwin Procter LLP, published a story in Real Estate Investment & Finance: The Case for Exotic Notes in Commercial Real Estate Transactions. “PIK (payment-in-kind) Notes and Toggle Notes, which began as alternative debt instruments with safety valve features attractive to the real estate industry, became a life jacket keeping overly aggressive financially [...]
The CMBS Market has Re-Opened
According to Bloomberg, Morgan Stanley and Bear Stearns Cos. sold the first commercial mortgage backed security of the year: Morgan Stanley Sells First Commercial Mortgage Security of 2008. It was a $1.2 billion dollar package of which $630 million was in the senior position. As you might expect the spreads were very high and the [...]
A CMBS and CDO Primer
Parke Chapman wrote a primer in the National Real Estate Investor on CMBS, CDO and the commercial debt markets. Some highlights: Q: What led to the formation of the first commercial real estate CDO in 1999? A: Commercial real estate CDOs were a major innovation in part driven by the need to diversify risk after [...]
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