A/B Tranching of Commercial Real Estate â Secured Loans: An ...

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Servicing Standard • Usually, but not universally, the servicing standard for an A/B participation requires the servicer to service the loan ―with a view to the best interests of the holders as a collective whole‖ but taking into account the relative priorities of the A tranche and the B tranche, the subordination of the B tranche to the A tranche or other language to similar effect. 15
Approval and Consultation Rights of B Participant other than in Securitized Loans • The lead lender, agent or servicer is typically allocated responsibility for normal administrative decisions with respect to the loan (e.g., approval of loan disbursements, budgets, insurance, leases), for modifications or waivers that are immaterial and for much of the administration of property taken back in foreclosure. 16
Page 1 and 2: ©2012 Morrison & Foerster LLP | Al
Page 3 and 4: A/B Tranching of Commercial Real Es
Page 9 and 10: “Pari Passu” vs. “Sequential
Page 11 and 12: Identity of the B Participant/Trans
Page 13 and 14: Identity of the B Participant/Trans
Page 15: Servicing Standard • In transacti
Page 19 and 20: Approval and Consultation Rights of
Page 25 and 26: What is a “Control Appraisal Even
Page 35 and 36: The Servicing Standard Override •
Page 37 and 38: B Holder’s Cure Rights • The B
Page 39 and 40: B Holder’s Purchase Option • Ma
Page 41 and 42: B Holder’s Purchase Option • Th
Page 43 and 44: Rights to Replace the Agent/Service
Page 45: Rights to Replace the Agent/Service

A/B Tranching of Commercial Real Estate â Secured Loans: An ...

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A/B Tranching of Commercial Real Estate â Secured Loans: An ...