Time Is Not Free: Loan Modifications in SASB CMBS 2.0
Single-asset single borrower (SASB) commercial mortgage-backed securities (CMBS) activity is expected to remain an important part of the market, while upcoming loan maturities will continue to test refinancing availability and lender selectivity. Following KBRA’s prior SASB default and loss research, this report reviews 54 SASB CMBS 2.0 loans that were modified. The analysis focuses on what borrowers provided in exchange for additional time and whether the modifications included meaningful lender protections.
Key Takeaways
Loan extensions were the most common workout tool (65%), and all but one extended loan included at least one additional modification feature.
Additional sponsor contribution (56%), cash management (50%), and liquidity management (48%) were among the most common borrower or structural concessions.
Reperforming loans had the highest modification complexity, averaging 2.6 workout features excluding loan extensions.
The data does…
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