1)TFThe use of swap rates rather than treasury rates as a basis for pricing fixed-rate debt came...
Question:
1)TFThe use of swap rates rather than treasury rates as a basis for pricing fixed-rate debt came about partly as a result of events (such as the Russian debt default) causing "flights to quality" that distorted US treasury yields as reflective of true long-term risk.
2)TFThe Master Servicer of a CMBS securitization is selected by the
purchaser of the B-piece.
3)TFAs a result of the seizing up of the capital markets in 2008, and the shutting down of the CMBS market specifically, life insurance companies, the traditional providers of long-term fixed rate debt to commercial real estate, increased their volume of lending such that they completely filled the vacuum left by the severe reduction of CMBS origination.
4)TFIn an A/B note structure, the B-note is not part of the CMBS collateral pool.Therefore, the borrower makes separate debt service payments directly to both the A-note and the B-note holders.
5)TFTrustees, in addition to their normal functions as set forth in the PSA, also provide a "liquidity facility" that bridges the time gap between principal and interest payments by borrowers and payments to bondholders.
6)TFIn a Credit Default Swap (CDS), one party purchases from a counter-party "insurance" against the default of a debt instrument.It was not unusual to find these non-cash, synthetic derivative products in 2006 and 2007 CRE CDO securitizations.
7)TFOne of the factors taken into account by purchasers of an IO tranche is the purchaser's expectation of the future movement of long term interest rates.
8)TFIn applying ratings to CMBS securitizations, rating agencies take into
account the quality and competence of the servicers.
9) TFPost-2009 securitizations have been labeled "CMBS 2.0".Most every
one of these 2.0 securitizations (but not all) includes a party not seen in pre-2008 securitizations.This party, given various titles (Senior Trust
Advisor, Operating Advisor, etc.), acts to protect the interests of
bond holders with regard to the actions of the Special Servicer.
10) TFInitial Pricing reports of new securitizations that appear in the
Commercial Mortgage Alert identify both the B-piece buyer and the IO buyer, even though these bonds are privately placed.