Better not to know: retail CMBS deal skips valuation

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By Owen Sanderson
13 Oct 2020

Kanaal, a CMBS backed by shopping centres in the Netherlands, will skip this year’s property valuation for the largest loan, as “any valuation obtained in 2020 would not give a true representation of the market value that will be used for testing of the loan to value covenant”.

Other CMBS borrowers may wish they could achieve the same treatment, with the Maroon loan in Elizabeth Finance, a UK retail CMBS, breaching its 75% LTV covenant in March with an updated valuation giving 94% LTV. That, however, was pre-pandemic, and research from Bank of America suggests a ...

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