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Jul 23, 2020

Challenge equals opportunity: lessons for lenders from COVID-19

Six months ago, the lending industry was operating much as it had done for many years. Where other financial services organizations have seen significant advances in the availability and adoption of technology to automate and streamline operations, paper forms are still commonplace for lenders. These forms are often walked from one side of the office to the other, and handed from one staff member to another, with a notable lack of straight through processing.

Jul 16, 2020

Mezzanine lending strategies and solutions

SS&C recently participated in an online panel with IMN to discuss tranched loan workouts, forbearance and restructuring. Topics included lender strategies for defaulted loans and managing mezzanine loan foreclosures.

As the panelists pointed out, the mezzanine holder is sandwiched between the mortgage holder (Lender) and equity holder (Borrower), so the rights and limitations of this structured debt are governed primarily by the intercreditor agreement. The ability to constructively interact with the mortgage lender for any remedies is essential for maximizing returns on mezzanine debt.

Jun 26, 2020

Managing credit risk during a global pandemic—key considerations and best practices

Following up from the SS&C Algorithmics Webinar “Managing Credit Risk During a Global Pandemic – Key Considerations and Best Practices” held on May 20th, we wanted to share some of the interesting insights gained from our audience poll of three topics relevant to the webinar discussion.  In terms of COVID-19 recovery expectations, participants overall appeared to lean more towards conservative presumptions with respect to the expected course of the recovery, with 92%believing that a prolonged “U,” delayed “L” or broken “W” shaped recovery would ensue, with only 8%believing that a swift “V” shaped recovery would prevail. Perhaps this reflects the more sobering realities of the severe impacts the economic shutdown has had on global output and employment, and expected levels of bad debt and credit losses likely to accrue to existing bank balance sheets.

Jun 15, 2020

Operational readiness to capitalize on opportunities emerging from COVID-19 for Private Debt

The term “private debt” is typically applied to debt investments that are not financed by banks and are not issued or traded in an open market. Since the 2008-2009 global financial crisis (GFC), private debt has found its way to portfolios of institutional investors. Regulatory changes have required that banks deleverage their balance sheets, and non-bank lenders and private debt funds have emerged as the alternative to the debt that was previously available through banks.

May 15, 2020

The Cayman Islands Private Funds Law 2020: an overview of the latest changes

Global regulation surrounding the alternative investment industry continues to evolve. Private fund jurisdictions have expanded requirements by adopting legislation that requires private funds, which have previously been exempt from registration, to be subject to additional compliance and registration requirements similar to those currently in place for open-ended structures. There are, however, differences specific to private funds.

May 7, 2020

Trends reshaping the real estate investment landscape

As we respond to the effects of the COVID-19 pandemic, we will experience several events that will continue to stress commercial real estate and credit markets. The International Monetary Fund has reported that we entered a recession “as bad as or worse than in 2009.” However, a projected recovery in 2021 is expected if we can contain the virus. To support and cushion the impact on the markets, the G20 recently committed over $7 trillion, or more than 6% of global GDP.

May 6, 2020

Getting it REIT

The COVID-19 pandemic sent the world’s financial markets on a roller coaster ride, and the demand for real estate investment trusts was no exception. Much has been written about the impact on REITs from uncertain real estate asset values, mortgage and rent payments, funding constraints and tightening liquidity. On the flip side, some observers are seeing the wake of the crisis as an excellent time to buy distressed debt and commercial mortgage-backed securities (CMBS) at deep discounts. A record 939 commercial real estate funds were reportedly raising money in the market during April 2020, according to data from analyst firm Preqin.

Apr 29, 2020

Lending efficiently to those who need a bridge

The recently signed CARES Act provides a substantial package in monetary relief to the public health sector, major corporations and small businesses nationally. While many firms will secure all the assistance they need, others will need more help as the economy returns. Those firms will likely turn to bridge lending as a path forward.

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