Asset Securitization Report - September 2017

So-called transitional lending has traditionally been kept on balance sheet; but it’s become attractive to bundle the loans for transactions called (take a deep breath) commercial real estate collateralized loan obligations. Can investors stomach the features these deals sported before the crisis?

The $456.9 million LCCM 2017-FLI is secured by 19 commercial mortgages, the largest of them an amended and restated loan on Two Gateway, an office building in downtown Newark, New Jersey.

It’s not clear whether syndicated credit agreements require 100% investor consent before adopting a new benchmark. The industry trade group suggests giving new loans the flexibility to change indexes without unanimous approval, but investor advocates are balking.

Property Assessed Clean Energy loans can no longer be offered in unincorporated areas of Kern County, Calif. The controversial loans, meant to promote energy efficiency, began in California and are now offered in a number of states.

U.S. District Judge André Birotte has dismissed all federal claims against Renovate America and its government bond-issuing partners in three lawsuits that had sought class-action status.

Moody's believes that rules grandfathering existing transactions increase the risk that these deals could be left unhedged; it may downgrades some European RMBS and U.S. student loan-backed securities.

A handful of state regulators are discussing ways to create a single regulatory structure for fintech companies that are seeking regional or national business.