Commercial lending

Lenders pushed back against the notion that city dwellers' pandemic-driven flight to suburbia would hurt them. They say fewer landlords have sought deferrals as vacancy rates remain low and rent collections have stabilized.

Property debt funds, including at Blackstone Group Inc., raised $14.1 billion from April through September, compared with $15.7 billion a year earlier, according to research firm Preqin Ltd. Yet the expected flood of deals has so far been just a trickle.

Bankruptcy filings are surging due to the economic fallout of Covid-19, and many lenders are coming to the realization that their claims are almost completely worthless. Instead of recouping, say, 40 cents for every dollar owed, as has been the norm for years, unsecured creditors now face the unenviable prospect of walking away with just pennies - if that.

With the COVID-19 pandemic creating unprecedented challenges for small businesses, American Express has increasingly targeted its investments in that niche.

investors need to remember that speculative-grade companies aren’t immune from going bust, no matter how wide open the debt markets might be.

Pagaya Investments, which purchases loans from MPL platforms using AI-driven technology, is sponsoring a $423.9 million transaction, according to a ratings agency presale report.

Defaults have been milder than expected thanks to government relief and stricter underwriting. But with the crisis dragging on and policymakers unable to agree on a stimulus plan, loans to highly indebted companies remain at risk.

Money managers bargained away legal rights in exchange for higher returns in an ultra-low interest rate environment. Now they find themselves with precious little protection for their investments just as the pandemic is causing a wave of corporate bankruptcies across the country.

Deals, trends and research in structured finance and asset-backed securities for the week of Oct. 2-8

The San Francisco fintech, which is buying Radius Bancorp, will discontinue peer-to-peer lending and instead offer new products, like high-yield savings accounts, to its retail investors.

Money managers bargained away legal rights in exchange for higher returns in an ultra-low interest rate environment. Now they find themselves with precious little protection for their investments just as the pandemic is causing a wave of corporate bankruptcies across the country.

The ratings agency reported that the average percentage share of triple-C rated loans in CLO portfolios fell below 10% for the first time since March.

The quarterly numbers were boosted by $11.3 billion in new deals last month, the most active month for CLOs since April 2019.

Credit research analysts cite a "significant" drop in defaults since the 2Q and improving macroeconomic indicators.

Deals, trends and research in structured finance and asset-backed securities for the week of Sept. 25-Oct. 1

Overall debt outstanding for delinquent commercial and multifamily mortgages cut down in September as more of the economy opens further with lodging and retail far behind, according to the Mortgage Bankers Association.

Delinquencies will rise due to the severe effects of the pandemic on the commercial property sector, Fitch said.

Spreads and investor demand make conditions ripe for a surge in CLO deals before the election, but a strain on loan supply may complicate the picture.

Brigade Capital Management, Blackstone Group Inc., CIFC Asset Management and Bardin Hill Investment Partners are among the firms looking to change the terms of the CLOs they oversee to put them on better footing when companies they’ve lent to can’t meet their obligations. Collateral managers are often handcuffed in distressed situations due to strict checks on the risks they can take.

Commercial real estate loans are vulnerable as financial assistance for tenants winds down and might not be fully renewed. Late rent payments could rise, leading lenders to press landlords to pay up.