ABS market calm before the CMBS storm

Legacy CMBS deals are becoming more and more acrimonious, as CMBS investors lose patience with extensions and waivers. Noteholders in deals like REC 6 and Opera Finance (Uni-Invest) are struggling to find solutions that will return their principal, while borrowers exploit the divisions between noteholder classes to get more favourable terms. At the same time, a new generation of CMBS deals will seek to avoid the mistakes of the past, and the workout of White Tower 2006-3 shows that with the right conditions, investors will get their money back.