Find the mortgage

You can use the Loan Manager (LM) function to project when payday loans consolidation in a CMBS deal may default and estimate recoveryvalues. First type WBCMT 2007­C31 A2 <Mtge> LDES <Go> to view a snapshot of a deal securitizedbyWachovia Corp. in 2007. As of mid-October, 5 percent of the deal’s $5.8 billion of collateral had been transferred to special loan ser­vicers, while 42 percent was on a watch list for po­tential difficulties, the screen shows.

 

To use LM to analyze the Wachovia deal, type LM <Go>, tab in to the SRCH BY DEAL NAME field, enter WBCMT 2007-C31 and press <Go> to load all 189 loans that back the Wachovia Bank Commercial Mortgage Trust Series 2007-C31 deal. To calculate potential defaults and recovery values for particular loans in the deal under various scenarios, click on the Show Asmptn button on the red tool bar.

Credit Driven Assumption

The Wachovia deal contains a mortgage for the Boston Marriott Long Wharf Hotel, which was ob­tained by the property’s owner, Sunstone Hotel Investors Inc., in 2007. You can find the mortgage by pressing <Page Fwd> until you see it in the list of loans. In July 2009, the loan was put under re­view by its special servicer, LNR Partners Inc., af­ter Sunstone indicated to LNR that the property may not generate enough cash to meet loan pay­ment obligations. As of mid-November, the loan was current, and Sunstone officials speaking on the real estate investment trust’s third-quarter earnings conference call noted strengthening conditions in Boston, says Bryan Giglia, vice pres­ident of corporate finance at Sunstone.

To use your own projections to build scenarios for determining whether a future default on the loan is possible, when it might occur and what the potential loss might be, click on Credit Driven Assumption at the bottom of the screen.

 

Click on the box to the left of Default If so that a check mark appears and then tab in to the DSCR < field. Enter 1.1 to assume the loan will default if the debt-service-coverage ratio falls below 1.1, or when net operating income covers less than 1.1 times the required loan-servicing amount. Then tab in to the LAG field below it and enter 18 to as­sume any resolution period will take 18 months.