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Volume 1 - Number 6 | June 24, 2004
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TOP STORY: JER Partners To Take Fund Public
After 24 years as an exclusively private specialty-finance firm run by financier Joseph E. Robert, Washington, DC-area investment company J.E. Robert Cos. is taking a CMBS fund public that will specialize in buying conduit debt, primarily B-pieces.
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INSIDER: Moody's Tad Philipp
Last week Moody's Investors Service rolled out Commercial Mortgage Metrics, a new software product designed to quantify potential defaults and loss-given default for real estate investors by using a set of proprietary credit-risk metrics developed by the company. CMBS forum recently caught up with Tad Philipp to discuss ever-sharpening new credit risk metrics in the industry and, more generally, what the CMBS universe can expect going forward.
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Market Insiders Call For Higher Subordination Levels
Back when commercial mortgage-backed securities were first rated, rating agencies required subordination of about 30% for BB bonds and their equivalents. Today, that required reserve has now dropped to around 3% for BB-type bonds—and some investors are saying that the numbers are now too low, possibly contributing to the frothy market currently characterizing CMBS deals.
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"Must Carry" Terrorism Insurance Provision Sticks
Responding to, in part, pressure from powerful real estate and insurance lobbies, US Department of the Treasury Secretary John Snow has agreed to extend a rule requiring the insurance industry to offer terror insurance to building owners until the end of 2005.
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