CMBS

Recovery rates on liquidated US CMBS loans rose sharply to 69.5% in Q2, according to Fitch Ratings’ latest CMBS special servicing index. Stephanie Petosa, a Fitch managing director, noted in a statement that the substantial rise came after the rate had reached historic lows the two previous quarters, adding that “a sizeable portion of CMBS loans were liquidated with less […]

US CMBS delinquency rates stalled last month after a 13-month free fall, but experts said they could bounce back with the help of upcoming online property auctions. Research and data group Trepp said the overall US CMBS delinquency rate decreased by just one basis point in July, to 6.04%, after a year-to-date drop (through June) of […]

The £750m proposed agency CMBS to refinance Westfield’s Stratford City shopping centre in London has been pulled amidst uncertainty over ‘skin-in-the-game’ regulations. Westfield, advised by its banking partners Deutsche Bank and Crédit Agricole, had decided not to retain 5% of the notes, the so-called ‘skin-in-the-game’ designed to regulate arranging banks and align their interests with […]

Canadian Pension Plan Investment Board and Metropolitan Life have acquired $475m of mezzanine debt as part of a refinancing of five Kyo-ya Hotels & Resorts in Hawaii and California. CPPIB through its CPPIB Credit Investments II vehicle has bought a $300m junior mezzanine (B) loan at Libor plus 6.6% secured on the hotels, while MetLife invested in a $175m senior mezzanine (A) loan with a Libor plus 4.5% interest rate. The Hawaiian hotels – Sheraton Waikiki, Sheraton Maui Resort & Spa, Westin Moana Surfrider and The Royal Hawaiian – and The Palace Hotel (San Francisco) have a combined 4,016 rooms. The hotels were refinanced by Deutsche Bank via its New York-based German American Capital Corporation subsidiary. GACC was the originator and mortgage loan seller, while the Japanese Kyo-ya Hotels & Resorts is the borrower. A two-year, floating-rate loan with three one-year extension options, secured by the fee and/or leasehold interests in the full-service hotels was securitised as COMM 2014-KYO and, in addition to the first mortgage loan, GACC originated the two mezzanine loans on the deal. Deutsche Bank priced the $551m top slice of the seven-tranche $1.4bn CMBS deal at Libor plus 90 basis points, with S&P and Morningstar rating it AAA. The quality and location of the properties, positive operating trends and strong Hawaiian tourism were among the strengths listed by the agencies in presale reports. The hotels operate under three different Starwood-affiliated brands: Westin, Sheraton, and The Luxury Collection. The issue is the second refinancing of the portfolio in just over a year; in 2013 Goldman Sachs issued a $1.1bn CMBS, GSMS 2013-KYO, backed by most of the same collateral. In an unsolicited commentary on the latest deal, Fitch said that the top tranche rating was consistent with its own AAA rating, but that it “likely” would have assigned subordinate ratings to subordinate tranches, because of the $300m of additional debt that has been tacked on, even though 1,142-room Sheraton Princess Kaiulani, the weakest property in the GSMS 2013-KYO pool, does not feature in the current issue. “The increase in total debt and the reduction in supporting collateral should give investors pause,” the Fitch report stated, calling the additional debt part of a “troubling trend” among US CMBS lenders. Fitch's maximum leverage for a 'B-' rating is 80.5% which would allow $1.159bn of debt, and a spokesperson would elaborate only by saying that the LTV on $1.4bn would be materially higher. S&P acknowledged that at an 82.6% LTV based on its valuation, the loan is “highly leveraged” and “higher than most single-borrower transactions we have rated recently.” With the mezzanine debt, the LTV increases to 110.6%. “We are aware of the risks Fitch highlighted and factored them into our analysis, but disagree with their conclusions,” a spokesperson for S&P said. “There have been numerous occasions where we believed that the risks were greater than our competitors did but we think the market benefits from a diversity of opinions on credit risk.”

Helaba has financed the first phase of Tristan Capital Partners’ Embankment Greengate office development in Salford, Greater Manchester.

Goldman Sachs’ €198.2m Italian MODA 2014 CMBS closed yesterday at pricing wider than Deutsche Bank’s larger and lower- leveraged €354.9m Italian CMBS...

Bank of America Merrill Lynch sold its £211.5m Taurus CMBS UK 2014-1 yesterday to 15 investors, with the class A notes tightening to 140 basis points over three month Libor. Europe’s second new CMBS this year to  price and close was oversubscribed twice overall.  Initial guidance had been 150 bps for the class As (up to […]

Goldman Sachs has today launched the third new European CMBS deal this year. The €198.2m MODA 2014 transaction is the third European CMBS and the second Italian deal this year. It follows DECO-2014 Gondola, Deutsche Bank’s first post-crisis Italian deal which was sold last week, and Bank of America Merrill Lynch’s Taurus UK 2014-1 where the loan is […]