Floating-rate triple-A CMBSs are now cheap relative to credit cards, but a heavy 1Q pipeline will likely stop them from tightening until May. In fixed-rate triple-A CMBS, leaves recommendation at neutral as triple-A spreads remain fair. In mezzanine investment-grade classes, double-As and single-As now appear historically rich. But triple-Bs have sold off and triple-Bs are 5bp cheap. Support and WAC IOs are cheap to fair value. Recommends IOs for the carry. At recent levels, PAC-like IOs appear fair to five-year triple-A CMBSs, but should tighten as the market starts comparing the sector to similar duration debt. Seasoned premium-dollar CMBSs are now cheap.
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Both pools have exposures to large dealers, so losses could be more pronounced if one dealer goes bankrupt, while both series have revolving periods, when noteholders will not receive any principal.
May 3 -
The Federal Reserve, Federal Deposit Insurance Corp. and Office of the Comptroller of the Currency issued a 30-page guidebook on managing affiliate risks. The report builds on formal guidance issued last year.
May 3 -
In talks with OCC officials, "it became obvious that we would not gain near-term approval given their recent experience with multifamily and CRE positions," FirstSun CEO Neal Arnold says. The companies announced other revisions to their deal, too.
May 3 -
Subordination provides credit enhancement to the notes, as well as deposits in the reserve and redemption accounts.
May 3 -
The capital structure features initial exchangeable notes among the class A, mezzanine and B1 notes. The super senior and senior support tranches will repay noteholders on a pro-rata basis.
May 2 -
The company's branches and loan officers will transition to ML Mortgage but operations staff are not part of the deal.
May 2