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

More documents

Recommendations

Info

Approval and Consultation Rights of B Participant other than in Securitized Loans • Each holder (whether A or B) that is adversely affected by proposed modifications or waivers that relate to the fundamental economic terms of, or credit or collateral support for, the loan is typically granted approval rights over such modifications or waivers. These ―Unanimous Decisions‖ typically include: • changes in interest rate, fees or term • forgiveness of principal or changes in commitment amounts • changes in or release of collateral • release of the borrower or guarantor • changes in overall voting rights of the lenders 17
Approval and Consultation Rights of B Participant other than in Securitized Loans • A controlling group of the holders is typically granted the authority to approve of other material consents and waivers such as the decision to accelerate, to commence foreclosure, or to waive or modify financial covenants or insurance requirements. • That controlling group may be defined as a majority or supermajority of all lenders (e.g., 51% or 66-2/3% of all lenders) or one or more specific classes of the lenders (e.g., a 51% or 66- 2/3% majority, determined separately, for the class of A holders and the class of B holders) or, for certain decisions, the B holders exclusively. 18
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 and 16: Servicing Standard • In transacti
Page 17: Approval and Consultation Rights of
Page 21 and 22: Approval and Consultation Rights of
Page 23 and 24: 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 ...

Create successful ePaper yourself

Delete template?

Save as template?

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