Securitization

Most providers of property assessed clean energy financing shoot for relatively modest credit ratings in the securitization market. But CleanFund wanted to set itself apart.

The bank is balancing that exposure with a greater amount of property diversity and the the inclusion of three large investment-grade-type loans for UBS Commercial Mortgage Trust 2018-C12.

The bulk of the collateral, 59.6%, was acquired from Impac Mortgage Corp., a lender with a long track record; the remainder, 40.4%, from Sprout Mortgage Corp., a relative newcomer.

Freddie Mac produced modest second-quarter results, reflecting a stabilizing business that CEO Donald Layton compared to a utility company.

As a result of the forward flow agreement, Kroll has increased expected recoveries, allowing Upstart to lower credit enhancement on its next securitization.

Towd Point Mortgage Funding 2018 Auburn 12 Plc is backed by 2,913 properties, all of which were previously securitized in the sponsor’s 2015-vintage Auburn Securities 9 portfolio.

Recent documentation tweaks that afford "excessive amounts of flexibility" to CLO managers can introduce "material, and even unquantifiable, risks" into transactions, according to the rating agency.

A $333 million first mortgage on the Palmer House Hilton, a 24-story building with 1,641 guestrooms in Chicago’s central business district, is being securitized by JPMorgan Chase.

The credit quality of the initial collateral pool is similar to that of United Auto Credit Corp.'s previous transaction, but the performance of the lender's managed portfolio of subprime loans is improving.

Just 5.1% of the $91 million of liens backing the transaction are vacant, down from 9.2% of the prior deal; this allowed the sponsor to borrower more heavily against the value of hte collateral.

The amount of loans cherry picked by the likes of SoFi and CommonBond fell by 3%, to $221 million; just as well, since Sallie Mae's grad school loans are off to a slow start.

Redwood Trust has priced a new stock offering that is aimed at increasing funding to new initiatives like investments in the single-family rental and multifamily sectors as well as routine business.

A $100.3 million sliver of the $1.7 billion loan is being used as collateral for a conduit securitization called Benchmark 2018-B5 Mortgage Trust, according to DBRS. It represents 9.9% of the $1.04 billion transaction.

Should cash flow for subordinate classes fall short, a debt-service coverage ratio trigger would defer interest payments and prevent a default event.

The Chicago-based corporate small-business lender and CLO management firm also reduced the cost in subordinate notes as it chose to maintain the existing reinvestment and maturity periods limiting the deal's shelf life.

Nonbank mortgage-backed securities servicers increase their exposure to agency loans as the housing market distances itself from last decade's crash, according to Fitch Ratings.

Kroll Bond Rating Agency says the riskiest notes issued in the 2016 transaction are at “substantial risk of loss,” following on the heels of a similar move by S&P last week. Kroll also put a more senior class of notes under review for a possible downgrade.

Extell Development obtained a 119-month, $110 million mortgage and two mezzanine loans totaling $140 million from Natixis; proceeds repaid existing debt of $209.2 million and funded closing costs as well as a rent step-up reserve.

The triple-A rated senior tranche of Ares European CLO X has a coupon of 85 basis points above Euribor, an indication that a four-month widening trend in Europe CLO spreads continues; the deal is expected to close in September.

The transaction, Shelter Growth CRE 2018-FL1, is backed by 22 properties with a total balance of $415.1 million; it is static, meaning the only new loans to be added to the trust will be "companion” interest in loans secured by existing assets.