2018 could be defeasance sweetspot for some CMBS borrowers, says Kroll

Analysts at Kroll Bond Rating Agency have predicted that more CMBS borrowers may elect to “defease” their collateralized bonds this year before rates creep higher, although investors say an overheated commercial real estate market could drag on prepayment rates.

  • By Alexander Saeedy
  • 06 Jun 2018

Rising commercial property prices mean defeasance could be an attractive prepayment option for some CMBS borrowers this year, despite US Treasury 10 year yields rising to 3% for the first time since 2014 earlier this year, according to Kroll.

Defeasance allows CMBS borrowers to pay off CMBS bonds by ...

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