Navigating the Complexities of CMBS Loan Assumptions, Prepayments and Defeasance

Strategies for Counsel to Borrowers, Lenders and Loan Servicers in Refinancing CMBS Loans Nearing Maturity

Recording of a 90-minute premium CLE webinar with Q&A

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Conducted on Tuesday, November 24, 2015

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Course Materials

This CLE course will discuss the complexities involved in CMBS loan assumptions, prepayment and defeasance. The program will look at strategies and action items for borrowers, lenders and loan servicers to deal with these transactions.

Description

The wave of CMBS maturities coming in the next two years, combined with the strong market for commercial real estate debt, will likely result in a high volume of commercial mortgage loan prepayments, defeasances and assumptions over the next few years. Borrowers wishing to take advantage of these opportunities will need to exit their current CMBS loans and may be surprised by the limitations contained in their existing CMBS loan documents.

Many CMBS loans are not by their terms prepayable. Defeasance allows a borrower to prepay a CMBS loan by substituting the real estate collateral with securities collateral. This allows the property to be sold or refinanced. In order to successfully execute a defeasance, a borrower needs to know the process and the players involved.

When defeasance of a CMBS loan is not possible or practical, or an interested party wishes to keep the existing debt in place, a loan assumption may be the appropriate exit strategy for the borrower. Approval of a CMBS loan assumption is a complicated process. Knowing this process can help borrowers navigate a successful CMBS loan assumption.

Listen as our authoritative panel of commercial real estate finance attorneys guides you through CMBS loan assumptions, prepayment, defeasance and best practices for borrowers, lenders and loan servicers to deal with the wave of CMBS refinancings.

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Outline

  1. Guiding clients through assumptions of a CMBS loan
  2. Guiding clients through a defeasance of a CMBS loan
  3. Guiding clients through prepayment of a CMBS loan
  4. CMBS refinance strategies for borrowers, lenders and loan servicers

Benefits

The panel will review these and other key issues:

  • What market forces are driving the refinancing of CMBS loans?
  • What are the distinctions between prepayment and defeasance and how does this impact the borrower and the lender differently?

Faculty

Dickey, Allen
Allen J. Dickey
Shareholder
Polsinelli

Mr. Dickey practices in all aspects of real estate finance, securitization, acquisition, leasing and development. He...  |  Read More

John T. Duncan, III
John T. Duncan, III
Shareholder, Practice Chair
Polsinelli

Mr. Duncan represents lenders, commercial mortgage servicers and special servicers, and other investors in a wide...  |  Read More

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