CMBS

Widening spreads in the European CMBS market are due to an oversupply of product and a lack of buying by the European Central Bank (ECB), an audience in London was told. The last three CMBS deals have been disappointing for the issuing banks, Bank of America Merrill Lynch with €145.8m Taurus 2015-3 EU DAC, and Goldman Sachs

A judge was wrong to hold that the CMBS issuer in the Titan v Colliers case was the correct claimant and also had no basis for finding an asset overvalued, the Court of Appeal in London has heard. Colliers is appealing against a High Court ruling last year that it overvalued an asset in Germany by €32m in the Titan Europe 2006-3 CMBS deal.

Credit Suisse is taking legal action against its own Titan Europe 2006-2 deal in what is believed to be the first action of its type by a Class X noteholder. The €862m 11-tranche Titan Europe 2006-2 deal contained a €50,000 Class X component. The transaction is a securitization of seven loans, originated by Credit Suisse, made on 208 properties located across Germany.

Proceeds from the sale of assets in the heavily defaulted £850m Gemini CMBS should be classified as principal and not interest, the High Court in London has ruled. The decision means that under the deal’s contract only the Class A noteholders should receive payments from any asset sales. Had the court ruled sale proceeds as interest, then the junior noteholders, classes B to E, would also be eligible for payments.

Improving industrial performance in the US could result in the sector becoming a larger part of commercial real estate lending through the CMBS markets, according to a new report from data and research firm Trepp.

There is no single cause for the widening in CMBS spreads that saw the last three European deals sell below par, delegates at Real Estate Capital’s Europe Forum 2015 heard today. Three CMBS deals, from Goldman Sachs and Bank of America Merrill Lynch, priced below par and are assumed to have made losses for the respective issuing banks.

Seven loans from a JP Morgan CMBS deal from 2006 have been liquidated, amounting to more than $82m in write-offs, according to data from research firm Trepp.

Goldman Sachs has priced its restructured €182.25m REITALY CMBS at a blended coupon of 317.4bps. The deal, a securitisation of a single €191.5m loan to Apollo Global Management for a portfolio of 25 Italian retail assets, was relaunched last week after being delayed in June.