The HQ had stood for “High Quality” when the bonds were
first issued, but bond owners might beg to differ.
The deal is one of
the 25 CMBS issues that makes up part of the CMBX 5 Credit Default Swap
Index. Prior to the March remittance
report which came out late Friday, shortfalls had reached the A-J class. The latest remittance report had shortfalls
hitting classes A-2, A-3, A-1A, and A-M, and X.
The deal is far from out of the woods and before all is said
and done, losses could reach the tranches that were originally AAA. Thus far, nine classes of bonds have been
extinguished by collateral losses. That has made the F class – originally rated
BBB plus – the first loss class.
The F class’ balance
has already been reduced by almost 75%. Still to be processed is a loss on the
Pier at Caesars.
That $80.5 million loan was carrying a $62.7 million appraisal
reduction – enough to wipe out all bonds up to the A-J class.
This month that amount was bumped up to over
$80 million – indicating a 100% loss (or more) is possible. That would be enough to wipe out 25% of the
A-J class.
The interest
shortfalls on the super seniors could be around for a while. According to the March remittance report,
the Pier loan still has $9.4 million in advances left to be reimbursed to the
master servicer. (We are not certain
why any interest was paid to the super seniors at all, considering this
number).
Contact:
Eric R. Gerard
Senior Vice President
Great Ink Communications
27 Union Square West, Suite 205
New York, NY 10001
(212) 741-2977
