Tuesday, August 30, 2011

Innkeepers sues Cerberus and Chatham

Dealbreaker - with nice imagery
WSJ - more detail

Innkeepers USA Trust said Cerberus Capital Management LP abandoned a $1.12 billion deal to buy the hotelier as part of a ploy to pay a lower price and must close the transaction or pay "substantial damages."

In a lawsuit filed Monday in a federal bankruptcy court in New York, Innkeepers said the two sides "stood at the goal line" Aug. 5 to consummate the deal when the private-equity firm told the hotel owner it wouldn't close, offering "no explanation." The decision upended plans by Innkeepers to exit bankruptcy protection, where it has been since July 2010.

Cerberus, which had agreed to buy 64 Innkeepers hotels with partner Chatham Lodging Trust, terminated the deal earlier this month, saying a "material adverse effect" had occurred that gave it permission to walk away. The buyout firm has since asked for a $20 million deposit on the deal to be returned.

Sunday, August 28, 2011

The Renaissance loan extended

 The Real Deal reports, and by "reports", we mean that they posted a prepared press less from The Moinian Group.

Does anyone know how long the extension is for?

Friday, August 26, 2011

Residential - Refi the entire market?

So, the government is going to cause a ginormous refi wave in resi-land, at least that has been the rumor for well over a year now. Instead of demanding MORE collateral from homeowners who owe mortgage debt that is no longer protected adequately by the underlying collateral's value, you constantly hear some politician babble on about saving the poor non-delinquent mortgagor from having to meet obligations that he agreed to in writing and backed with the most precious collateral (the roof over his family's head) - I find the entire affair somewhat disgusting if you cannot tell. You agreed to make payments, you put up collateral in the event you cannot pay, and those are the terms.

I'm sure I will not be consulted for my opinion, but the rumors are now starting to crescendo, and I am really interested in your thoughts on how this might be structured and how to gain from it in the market... PLEASE LEAVE YOUR THOUGHTS IN THE COMMENTS!

  • Do they only allow Agency mortgages to refi? (Ginnie too, or just the two in conservatorship?)
  • What credit characteristics are allowed? Low FICO? Underwater mortgages? Currently not-late?
  • Do borrowers have to pay additional amounts to help protect the mortgages (they have higher LTVs, do they pay higher PMI? Is there some new product to help protect the lender against the greater sensitivity to both credit and systemic valuation changes?)
  • Who gets to originate the mortgages? and thus receive the origination fees?
  • Servicer? Can BOA originate and service them but put the risk to the Agency?
  • Will they be securitized - who is going to buy this, and what type of protections are there going to have to be (obviously at a cost to the taxpayer) to protect these new investors?
  • Who else benefits?
  • Who gets hurt? Does my Ginnie IO from 2009 origination, low coupon, ramp up and flicker out? How about my Fannie IO from 2005, high coupon? What about POs (they seem a little rich)?
I actually can see a path that is economically feasible, politically palatable, and hugely profitable to certain key players in the industry. If you are a policy maker, the Bernank, or Obama bin President, please email me at credarkspace@gmail.com for a detailed plan. All jokes aside, I am working on it, please don't do anything stupid that will destroy our economy in the meantime.

Monday, August 22, 2011

Cerberus uses MAC clause to back out of $1.1 billion Innkeepers USA

From Bloomberg:
Cerberus Capital Management LP and Chatham Lodging Trust terminated their agreement to buy 64 hotels from Innkeepers USA Trust for $1.1 billion, citing a possible adverse change in the business.

Thursday, August 18, 2011

$2.5 billion New Cantor deal?

DeReza at Bloomberg reported they filed a new shelf registration.

All is Lost!

No, BTFD. I mean, buy ammo, head for the hills....

CMBS is taking a beating - AJs being quoted in spreads yesterday are being quoted in prices today. 06/07 AJ are off about 3 pts on the week, most of it today. There does seem to be a little bounce back here at the end of the day, but not clear if it will last.

Monday, August 15, 2011

JER trades to C-III

JER sold its special servicing & CDO portfolios to C-III, adding 17 deals worth $35.4billion to C-III's stable and boosting their market share to 22%, or third place.

Hattip CrabsofSteel and Nomura

Sunday, August 14, 2011

DB UBS deal contains a 30% SS

Sounds like it priced last week. I'll come back and add pricing once I find it.


I was on vacation last week - did anything happen while I was gone?


Wednesday, August 3, 2011

Comings and Goings

Sternlicht blames Goldman for the deal blowing up. He noted that Cap rates were continuing their downward trajectory (he used the word "plunging", actually).

GGP is spinning off 30 malls into a new REIT named Rouse, but the malls are not the same malls purchased in '04 when GGP bought the company fka The Rouse Company. We forsee future plans to further spin the new Rouse into a company that will not have a name represented by alphanumeric symbols but rather by the symbol below.

13 of the malls are in CMBS deals. Nomura did a nice table of these yesterday, that I'm not going to steal outright, but the loans are mostly in '03 - '05 deals, with 4 from '01. As GGP deals go, the DSCRs are relatively low ranging from 0.89 to 2.19, and GGP noted that Rouse will immediately be amongst the largest B mall owners. Two of the malls in Rouse were originally slated to go back to the lender as part of GGP's bankruptcy, but they were bought via DPOs.

According to Wells Fargo - newly delinquent loans increased by 280 loans or $3.9 billion, but 30+ day delinquencies remained flat at 9.94% and 60+ increased by 8 bps to 9.01%. Highest losses concentrated in Retail and Multifamily.

$460mm AMs were out for bid, mostly from HFs, and spreads widened >25bps yesterday. LCFs were 20+bps wider. AJs were down a couple of points as well.


Cleaning House

While dealers thin their balance sheets of CMBS and hedge funds and money managers quickly scuddle their overpriced holdings, the real drama is on House - first the rumors that Olivia Wilde's character, 13, was going to be written off and die of Huntingdon's (although that has thankfully been disputed by the show's director), now Lisa Edelstein, Cuddy, is gone. AND, they may not even transition her out - sounds like she's just done.

After a summer of Jersey Housewives, the occasional Anthony Bourdain, and slow bond trading we better see some action this fall.