Welcome to the second issue of Cadwalader's REF News and Views.
Of late, some borrowers have been successful negotiating several liability for sponsors under guarantees in their transactions. We take a closer look.
Partner | Real Estate
By Livia Li
Associate | Real Estate
Europe Economics has published its final report on “EU loan syndication and its impact on competition in credit markets.” Here is a summary of that report and some observations.
The financial test of the Loan to Value (LTV) ratio in U.S. syndicated lending continues to be used in underwriting and certain covenant conditions. While we have seen a shift from the use of Debt Service Coverage Ratios (DSCR) to Debt Yields (DY) since the 2008 recession, the LTV ratio continues to be used in certain circumstances.
U.S. CMBS issuance equalled approximately $171 billion during 2018. In the same period, European CMBS issuance equalled approximately €4 billion which, whilst not close to the issuance levels of the U.S. CMBS market, represents a significant increase for the European market compared to any other period since the financial crisis. Issuance of U.S. CRE CLOs during 2018 equalled approximately $14.5 billion. The activity levels in 2019 for all of these products continue at a strong pace reflecting the global demand for commercial mortgage-backed securities.
Cadwalader once again sits atop the midyear commercial mortgage-backed securities (CMBS) tables published by Commercial Mortgage Alert.
A calendar of upcoming events in Europe and the U.S.