Showing posts with label Citi Never Sleeps. Show all posts
Showing posts with label Citi Never Sleeps. Show all posts
Monday, June 3, 2013
345 Park Avenue South (JPMCC 2004-C3) refinanced
According to a Bisnow email , Citibank provided a $100mm CMBS loan to takeout the $68.9mm loan (6.99% of JPMCC 2004-C3) currently on the property which had a maturity date of 1/1/2015 and 18 more months of defeasance. The sponsor is RFR USA (Aby Rosen and Michael Fuchs). The sole tenant is Digitas, with a lease roll in 11/2021, a couple of years before the new 10-year loan matures.
Thursday, July 28, 2011
CMBS Deal Pulled - Traders Quit
The GC4 deal was pulled today after S&P waffled and then pulled its ratings, but perhaps even more interesting is the fact that the head traders quit at both lead underwriters. Citigroup stated that the departure of Warren Geiger was in no way related to the GC4 transaction. Matthew Salem also left Goldman Sachs today.
So, sell all your CMBS - traders are giving up.
So, sell all your CMBS - traders are giving up.
Saturday, March 5, 2011
GGP Prepays
In 2009, the market was so idiotic about extension risk that it priced current and next pay bonds with teen yields. The pendulum has swung fully the other direction in that part of the curve. As Citi noted on Friday, 6 GGP properties are very likely to refinance, and every one of the related front-pay bonds is not only pricing above par but also has a negative yield (as bad as -12.57%) if the loans prepay as is expected.
They also highlighted the "special consideration properties" that GGP has listed that are in CMBS deals where they intend to throw the keys back. The 2 in red have been transferred back to the lenders (they have stated that they have already thrown back the keys on 3 others).
Wheeler was a fine analyst and had big boots to fill, but I have to say that Jeffrey Berenbaum's new team is really doing a good job with this kind of analysis.
| Bond | Dollar Price | Property | 0/0 Full Prepay Yield |
| COMM 2001-J2A A2 | $ 102.29 | Willowbrook Mall | -3.39% |
| GCCFC 2004-GG1 A5 | $ 100.51 | Deerbrook Mall | 0.71% |
| GSMS 2001-GL3A A2 | $ 102.30 | Northridge Fashion Center | -1.88% |
| LBUBS 2005-C5 A2 | $ 102.28 | Providence Place | -5.50% |
| WBCMT 2004-C14 A2 | $ 101.46 | Park Place Mall | -1.69% |
| WBCMT 2006-C26 A2 | $ 104.75 | The Woodlands Mall | -12.40% |
They also highlighted the "special consideration properties" that GGP has listed that are in CMBS deals where they intend to throw the keys back. The 2 in red have been transferred back to the lenders (they have stated that they have already thrown back the keys on 3 others).
| Deal | Loan | PCT of Deal |
| WBCMT 2004-C11 | Bay City Mall Bay City | 2.8% |
| LBUBS 2006-C1 | Chapel Hills Mall Colorado Springs | 5.1% |
| CD 2005-CD1 | Chico Mall Chico | 1.0% |
| MSC 2006-HQ9 | Country Hills Plaza Ogden | 0.5% |
| WBCMT 2005-C22 | Eagle Ridge Mall Lake Wales | 1.9% |
| GECMC 2005-C4 | Grand Traverse Mall Traverse City | 3.9% |
| COMM 2006-C7 | Lakeview Square Mall Battle Creek | 1.8% |
| CGCMT 2008-C7 | Mall St. Vincent Shreveport | 2.8% |
| CGCMT 2007-C6 | Moreno Valley Mall Moreno Valley | 1.8% |
| MLCFC 2006-4 | Northgate Mall Chattanooga | 1.0% |
| MSC 2005-HQ6 | Oviedo Marketplace Oviedo | 2.1% |
| BSCMS 2006-PW14 | Piedmont Mall Danville | 1.4% |
| CSFB 2005-C3 | Southland Center Mall Taylor | 7.6% |
Wheeler was a fine analyst and had big boots to fill, but I have to say that Jeffrey Berenbaum's new team is really doing a good job with this kind of analysis.
Monday, December 13, 2010
GSMS 2010-C2 ($876.45mm) *TALK*
Heard the 7th multi-borrower deal of the year priced, but I haven't seen the final levels. I updated guidance below
| Tranche | M/F | Size ($mm) | WAL | Subordination | Talk |
| A1 | Aaa/AAA | 347 | 4.87 | +120-125 | |
| A2 | Aaa/AAA | 376.072 | 9.84 | 17.50% | +130-135 |
| B | Aa2/AA | 26.293 | 9.95 | 14.50% | +210-220 |
| C | A2/A | 29.58 | 9.95 | 11.13% | +280-290 |
| D | Baa3/BBB- | 47.11 | 9.95 | 5.75% | +380-390 |
| E | Ba2/BB | 12.051 | 9.95 | 4.38% | |
| F | B2/B | 9.86 | 9.95 | 3.25% | |
| G | NR | 28.485 | 9.95 | 0.00% |
Monday, August 2, 2010
Tuesday, March 2, 2010
Bottoms Up?
Numerous sources have been hinting at a bottom in CMBS, including Barclays who said,
Housingwire noted that the CPPI is now down 44% on average, and 58% down for distressed properties - back to 2001/2002 levels. They also noted that the insurers bid will come back now that they can rate their own bonds - maybe for new issue, but not so much on legacy assets would be my guess.
They also note the coming risk of partial IO bonds, and this is a very real threat. Up until just last month, we were averaging about $2.5 billion in partial IO rolls each month, but that just spiked above $3 billion in January, and touches $4 billion by July. After a loan rolls from partial IO to amortizing, the average increase in debt service costs is around 20%, but lower coupon loans can get substantially above that, and amortization terms are all over the place. Although CMBS loans were ideally on stabilized properties, the worst offenders of proforma underwriting were loans structured as partial IOs - the lender would underwrite rents in year 5 to the necessary level, and to make it cashflow, would just not require amortization payments until month 61 (as an example).
As a more specific example, take a look at the largest loan to roll to amortizing payments this year, Grand Plaza, $86.5mm, in CD 2007-CD4. That property generated NOI of $6.4mm, and had debt service of $5.1mm last year - the new annual debt service will be approximately $1mm more at $6.1mm. The property cashflows at that level, but the debt service increased by 21.5%, and the property is already underwater at anything above 6% cap rates.
In all fairness, even last year, we had about $30 billion in partial IOs roll, which is about the same for this year, 2011, and 2012.
The biggest near-term concern is the expiration of TALF this month, but Citi made a very good point last week that repo lending has made its way back for most TALF-eligible bonds, and is competitive with TALF financing. They make a linear argument, but fail to explore why anyone would risk TALF if they could get a better deal in the repo market. TALF is clunky, and does not curry favor with either party like a nice repo line can.
Several folks have pointed to the 100 or so bps of tightening over the last 3 months, but in the grand scheme of things, the market has been pretty flat since last fall.
So, a bottom? maybe, but I think it's too early. We still have a lot of pain to work out in the pipeline, LNR still needs to file for bankruptcy, and we're only just starting to see a deluge of defaulted CMBS properties getting sold at viable prices. I don't think there is much to gain by holding a position through March just for the carry, but I also don't think we should all just sell all MBS like PIMCO has done.
From a macro perspective, an uptick is a clear positive, as it suggests that the gap between buyer and seller preferences is narrowing and could signal that some believe a bottom in prices is approaching.
Housingwire noted that the CPPI is now down 44% on average, and 58% down for distressed properties - back to 2001/2002 levels. They also noted that the insurers bid will come back now that they can rate their own bonds - maybe for new issue, but not so much on legacy assets would be my guess.
They also note the coming risk of partial IO bonds, and this is a very real threat. Up until just last month, we were averaging about $2.5 billion in partial IO rolls each month, but that just spiked above $3 billion in January, and touches $4 billion by July. After a loan rolls from partial IO to amortizing, the average increase in debt service costs is around 20%, but lower coupon loans can get substantially above that, and amortization terms are all over the place. Although CMBS loans were ideally on stabilized properties, the worst offenders of proforma underwriting were loans structured as partial IOs - the lender would underwrite rents in year 5 to the necessary level, and to make it cashflow, would just not require amortization payments until month 61 (as an example).
As a more specific example, take a look at the largest loan to roll to amortizing payments this year, Grand Plaza, $86.5mm, in CD 2007-CD4. That property generated NOI of $6.4mm, and had debt service of $5.1mm last year - the new annual debt service will be approximately $1mm more at $6.1mm. The property cashflows at that level, but the debt service increased by 21.5%, and the property is already underwater at anything above 6% cap rates.
In all fairness, even last year, we had about $30 billion in partial IOs roll, which is about the same for this year, 2011, and 2012.
The biggest near-term concern is the expiration of TALF this month, but Citi made a very good point last week that repo lending has made its way back for most TALF-eligible bonds, and is competitive with TALF financing. They make a linear argument, but fail to explore why anyone would risk TALF if they could get a better deal in the repo market. TALF is clunky, and does not curry favor with either party like a nice repo line can.
Several folks have pointed to the 100 or so bps of tightening over the last 3 months, but in the grand scheme of things, the market has been pretty flat since last fall.
So, a bottom? maybe, but I think it's too early. We still have a lot of pain to work out in the pipeline, LNR still needs to file for bankruptcy, and we're only just starting to see a deluge of defaulted CMBS properties getting sold at viable prices. I don't think there is much to gain by holding a position through March just for the carry, but I also don't think we should all just sell all MBS like PIMCO has done.
Friday, February 5, 2010
CMBS Delinquencies Accelerate
I know this is not new information, and it was widely reported over the last couple of weeks, but some charts to put it in perspective below from the Group Formerly Known As Wheeler's (GFKAW):
Nevada and Arizona are really sucking wind with >14% delinquencies. Behind them, there are a number of other >10% states, but most are relatively low overall CMBS exposures (i.e. Rhode Island, Virgin Islands, Montana, etc.).
Nevada and Arizona are really sucking wind with >14% delinquencies. Behind them, there are a number of other >10% states, but most are relatively low overall CMBS exposures (i.e. Rhode Island, Virgin Islands, Montana, etc.).
Wednesday, December 2, 2009
Wheeler to join Amherst Securities
From Bloomberg (no link):
Wheeler will join the company early in 2010 as head of CMBS strategy and “the company intends to build a comparable operation” to its residential-mortgage bond business, Amherst said today in an e-mailed statement...
... “We are very pleased to welcome an executive of Darrell’s caliber,” Amherst Chairman and Chief Executive Officer Sean Dobson said in the statement. “Together with Laurie Goodman, who oversees our RMBS strategy efforts, we believe Amherst is
now poised to provide more knowledge, insight and reliable data on the entire mortgage industry than any other broker-dealer.”
Wednesday, September 2, 2009
Mortgage Holder on the hook for collateral condi
Crain's reported last week that officials are up in arms over a Manhattan rent-regulated apartment building that has over 1,000 code violations because the mortgage holder (Citi) is not keeping the building up-to-code. Citi has not foreclosed on the building, mind you, a slum lord owns the building and owes Citi a mortgage, but advocates are going after Citi for the code violations. Apparently, Citi had made some empty gestures that they would ensure their collateral would not fall into disrepair.
Wonder what will happen when the advocates go after CMBS Trusts whose collateral has fallen into disrepair?
Wonder what will happen when the advocates go after CMBS Trusts whose collateral has fallen into disrepair?
Sunday, November 23, 2008
US Bailing out Citi?!?!?
From the WSJ, although GasPak was out with hints of it earlier today...
This may not be all bad, and it all depends on what their 'mortgage-related assets' really are, but the bad bank-good bank idea that was floating around is likely not good for stakeholders in the long-run in this case. Allowing Citi to take the first 13 - 14% loss on assets and the government coming afterwards, might be a good deal for everyone if the government is receiving a fair insurance premium for their backstop and if Citi's MBS exposure is being hurt more by liquidity than credit.
This may not be all bad, and it all depends on what their 'mortgage-related assets' really are, but the bad bank-good bank idea that was floating around is likely not good for stakeholders in the long-run in this case. Allowing Citi to take the first 13 - 14% loss on assets and the government coming afterwards, might be a good deal for everyone if the government is receiving a fair insurance premium for their backstop and if Citi's MBS exposure is being hurt more by liquidity than credit.
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