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

More documents

Recommendations

Info

“Pari Passu” vs. “Sequential Pay” Payment Priority • ―Pari Passu‖ Priority: Before certain ―subordination events‖ occur, the payments to the A holder and B holder have equal priority • ―Sequential‖ Priority: After the subordination events occur, the payments to the A holder have priority over the payments to the B holder • Even under a sequential waterfall, the payments to the A holder for default interest, late charges, prepayment premiums or similar items may be subordinated to the recovery of the B holder’s principal and non-default rate interest. 7
“Pari Passu” vs. “Sequential Pay” Payment Priority • ―Subordination events‖ can include any payment of default, but these events can also track the triggers for special servicing (e.g., ―imminent‖ payment event of default; bankruptcy filing; non-payment event of default that has material adverse effect) 8
Page 1 and 2: ©2012 Morrison & Foerster LLP | Al
Page 3 and 4: A/B Tranching of Commercial Real Es
Page 5 and 6: A/B Tranching of Commercial Real Es
Page 7: A/B Tranching of Commercial Real Es
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 and 18: 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 ...

You also want an ePaper? Increase the reach of your titles

Delete template?

Save as template?

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