Worth reading for many reasons. MF1 is just one of many. Oh, BTW, you will hear a lot of traditional investors say that CLO's are more stable than CDO's. That used to be true, but it is not anymore. The market will crash, and it will cause problems for investors. Then we will hear some outrage. And like 2008, taxpayers will finance the bail outs.
“You could make an argument the writing was on the wall by the end of 2021, and especially the first quarter of 2022,” one Sun Belt-focused investor said.
Through summer 2022, however, MF1 kept issuing floating-rate loans on deals that hinged on the ability to substantially raise cash flows. Now, across MF1’s almost $11 billion amortizing loan book, almost half of the deals are either watchlisted or delinquent, according to The Real Deal’s analysis of Morningstar data. MF1 declined to comment.
The Tides problem is particularly acute: At least $425 million in MF1-issued loans in its portfolio have landed on servicer watchlists after rising rates hurt cash flow and made it tough for the firm to make interest payments on its debts.
The bulk of MF1’s issued loans come due in the next 18 months, at a time of rising defaults and a dearth of new financing. Lenders will be left to make tough choices — take back the keys or sell loans at a loss.
No comments:
Post a Comment