What the Course is About
mortgage securitization represents one of the fastest-growing segments
of the structured finance market. This two-day course offers an overview of the techniques
of commercial property finance with a special emphasis on the securitization of commercial mortgage finance.
and Schedule Participants will be
provided with a package of materials useful to the structuring and
analysis of commercial mortgage-backed deals, including pertinent articles,
rating agency reports and sample documentation from actual
deals done in the US, Europe and elsewhere.
lectures will offer structure, the discussions will amplify, and
the case studies will apply tools and concepts to real-world
applications. Participants will work in teams to solve problems in
commercial real estate financing. The final session will include a team
complete the financing of a pool of commercial property loans.
Who Should Attend?
The seminar is of relevance to both potential
and investors in commercial mortgage-backed securities: property finance professionals,
commercial lenders and investment
securities analysts; investment officers and fund managers; real estate developers and
individuals whose professional future may be enhanced by an
of CMBS techniques.
to be Discussed
distinguishes commercial mortgage securitization from residential mortgage securitization?
are the key legal issues, and how are they addressed in the case of
drives ratings of CMBS?
- What is the track record of default and recovery?
- Highly leveraged commercial mortgage loans: debt or equity?
- Who bears the balloon risk in CMBS?
can one evaluate different CMBS structures?
- What is the role of the servicer? And the special servicer?
is the role and pricing of the super-senior tranche of some CBS?
- How do synthetic CMBS work?
- How is a CMBS deal structured?
Commercial Mortgage Backed Securities
Overview of the global market
How ABS deals are structured
Key legal issues in MBS, CMBS and REITs
Commercial Mortgage Securitization
Commercial MBS: retail, office, multifamily, hotels, etc
Highly leveraged CMBS
Rating of Commercial MBS
Key risks: default and recovery, prepayment/extension, liquidity
Gaining security interests in the loans and the properties
Analysis of commercial mortgage loan pools
Loan analysis and cross-collateralization
Stress testing mortgage defaults
Understanding waterfalls and prepayments in CMBS
DIversification in the pool -- what factors?
Servicing: subservicer, master servicer, special servicer
|Credit Enhancement in CMBS
Methods of credit enhancement
Concepts of LTV in CMBS
Senior-subordination credit support
Spread and reserve accounts; liquidity facilities
Funding the residual
Understanding and managing the balloon payment risk in CMBS
Default and workout
Multi-Tier and Super-Senior CMBS
Why have a multi-tier funding structure?
Senior, mezzanine, subordinate AAAs
Planned balance classes
True sale versus synthetic: the choice
Role of credit derivatives in the CMBS market
Structuring and Pricing a CMBS deal
Steps in setting up the structure
Getting a rating
Placing the debt
Exercise: arranging a deal. Teams negotiate the credit enhancement and financing of a pool of commercial property loans.
Pricing the securities
Understanding the economics
Belenus: A French Property Loan Securitization
Bear Stearns Commercial Mortgage Trust
Wachovia Bank Commerical Mortgage Trust
Perseus UK Commercial Loan Conduit
Castenea Synthetic CMBS
European Property Capital Hybrid CMBS
Anthony Sanders, Commercial Mortgage-Backed Securities
S&P, CMBS Property Evaluation Criteria
Fitch, Securitization of Sale and Leasebacks
Sample commercial mortgage agreement
Sample leasehold agreement
Sample intercreditor agreement
Sample closing checklist
Sample CMBS documentation checklist
Glossary of CMBS terminology
Ian Giddy is
on the faculty of finance at New York University, USA. He has taught
finance at NYU, Columbia,
Wharton, Chicago and abroad for the past thirty years. He was
of International Fixed Income Research at Drexel Burnham Lambert from
to 1989. The author of more than fifty articles on international
Dr Giddy has served at the International Monetary Fund and the U.S.
and has been a consultant with numerous financial institutions and
in Europe, North America, the Middle East and Asia. He has lectured in
more than forty countries, and has been involved in the asset-backed
securities market for over 15 years. He is the author or co-author of
Money Market, The Handbook of International Finance, Cases
in International Finance, Global Financial Markets, Asset
Securitization in Asia, and The
Hudson River Watertrail Guide.