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CRE Finance World, Winter 2012

CREFC B-Piece Buyers Sub-Forum Update BlackRockDan SefcikManaging Director Chair,CREFC B-Piece Buyers Sub-Forum T Elect, Nelson Hioe. It is safe to say that no one likes the OA regime 100%. B-Piecenone to those deals that have a more intrusive regime. The mostcommon structure involves deals with some form of OA that ispassive with the B-Piece investor in control.he B-Piece Investor Forum was created this year to bringB-Piece participants together and establish a dialogue —not only within our group but also with the various otherforums within CREFC. I chair the Forum along with Chair- investors would generally prefer none at all, while investment-grade Throughout the market’s history, B-Piece investors have played buyers would prefer a more intrusive OA. This disparity of views a vital role in the securitization business. Indeed, without them with respect to the OA has come about as a result of the inherent there would be no CMBS market. While the B-Piece community conflicts between the various investors throughout the capital stack. has been fragmented and the names change periodically, one The goal of this Forum is not to find what works perfectly for one thing that has been consistent is that there have always been a set of investors but to establish a common ground that is both small handful of players at the core. acceptable and workable to the majority of participants as well as satisfying the various regulators. The Forum has been addressing the role of the Operating Advisor (OA), which is one of the most hotly debated topics in the CMBS Discussions among various B-Piece buyers and other participants industry. Some version of the OA has been used for many years in the capital stack started in October with the primary goals of: (i) in other lines of securitization, but they were absent from CMBS identifying the issues surrounding the OA; (ii) attempting to crystallize until the last economic downturn that started in 2008. Since then, a common set of principles and (iii) surface issues that need to be there has been an increased level of interest for some form of an addressed. Upon completion of these preliminary objectives, the OA among some investors and regulators. CMBS 2.0 transactions group will outline potential solutions for consideration by the entire have contained many iterations of the OA, ranging from deals with CMBS community. A publication of Winter issue 2012 sponsored by CRE Finance World Winter 2012 69


CRE Finance World, Winter 2012
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