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Forum Spotlight: Investment-Grade Bondholders

November 20, 2023

Together, Richard, Rajesh, and Jane form the “Leadership Working Group” for the IG Bondholders Forums. This group sets the agendas and priorities for the Forum, as well as represents investors on CREFC’s Policy Committee.

Key Investment-Grade Bondholders Focus Areas:

• CRE CLO Surveillance template is being developed to provide standardized information to investors in a usable Excel-based format.
• Dialogue with stakeholders of the forum (IG investors) to understand their concerns and identify solutions.
• Work on improving reporting in Conduit and SASB transactions as the buy-side looks for standardized financials from borrowers and better disclosure from servicers with regard to loan modifications and fees.
• Leadership is concerned with loan extension risk as a result of higher interest rates; as a result, corporate single-A rated bonds continue to outperform AAA-rated CMBS.
• In the floating rate market, the replacement of SOFR caps upon expiration is an important topic, especially as loans lack the ability to cover debt service in the current interest rate environment. We continue to focus efforts on disclosure improvements and updating the IRP for these items.
• Transaction volumes are down considerably leading to decade low volume in the Conduit/SASB markets.

Looking ahead, leaders are focused on working with servicers to improve reporting accuracy and timeliness. Rising insurance costs in coastal markets put added stress on landlords.

Key Policy Issues:

• SEC’s Conflict of Interest in Securitization Proposal: The definitions are broadly written and could engulf numerous CMBS participants and a broad range of “conflicted activities” that go beyond shorting a transaction. CREFC submitted two comment letters on the issue and is engaging with lawmakers on Capitol Hill.
• 15c2-11 Public Disclosure of 144A Bond: The SEC recently issued an order exempting 144A fixed-income securities from 15c2-11 disclosure. CREFC and its members urged the SEC and Congress to take action to prevent the application of 15c2-11 to fixed income securities. The exemption order is a major win for the industry.

What’s next? Forum leaders look forward to presenting CREFC members with an update on their forum at the Annual January Conference in Miami. Soon after, the chairs will seek nominations for the next Chair-Elect to join their leadership slate.

To join the IG Bondholders Forum, please register here. For any forum related questions, please contact Kathleen Olin at kolin@crefc.org

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Forum Spotlight - Investment-Grade Bondholders

October 3, 2022

Together, Jane, Rich, and Manish form the “Leadership Working Group” for the IG Bondholders Forums. This group sets the agendas and priorities for the Forum, as well as represents investors on CREC’s Policy Committee.

Key Investment-Grade Bondholders Focus Areas/Goals

1. Quality, consistency, and standardization of investor reporting for the CRE CLO sector;

2. Improving disclosure of strike rates on interest rate caps for SASB loans in extension periods;

3. Re-authorization of National Flood Insurance Program (NFIP) to provide a backstop for flood insurance (NFIP has been extended to Dec. 16, 2022, as part of the the government funding deal); and

4. Continue CREFC efforts in establishing a set of disclosures focused on environmental factors, including data points relative to climate perils, energy consumption/efficiency, and greenhouse gas emissions.

Looking ahead, leaders are concerned about liquidity in the market, the impact of higher rates on loans’ ability to refinance, any degradation in floating-rate DSCRs and interest rate caps. They continue to consider the reduced representation of conduit CMBS in the Bloomberg Agg. Index and alternative benchmarks that incorporate a larger component of the CMBS universe.

What’s next?:  Forum leaders are planning a virtual forum wide legislative and regulatory policy update and will soon be formulating the agenda for CREFC’s January Conference.

To join the IG Bondholders Forum, please register here. For any forum related questions, please contact Kathleen Olin at kolin@crefc.org.

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CREFC Investment-Grade Bondholders Forum

February 22, 2022

Meet our leadership team:

CHAIR	CHAIR-ELECT	PAST-CHAIR
Manish Rajguru Portfolio Manager-CMBS OFS Capital	Jane Rivers Vice President, Credit Analyst TRowe Price	Meena Pursnani Director Metlife Investment Management

Together, Manish, Jane and Meena form the “Leadership Working Group” for the IG Bondholders Forum and set agendas and priorities for the Forum, as well as represent the constituency on CREFC’s Policy Committee.

Current issues include:

- ESG. CREFC is well along in establishing a set of disclosures focused on environmental factors. This includes 51 data points relative to climate perils, energy consumption/production/efficiency, and greenhouse gas emissions. ESG is a top issue for the forum as investors explore ESG allocations, and what ESG labeled investments can offer for performance, spreads or yields. Lack of federal laws or standards remains a concern as energy laws vary in local jurisdictions (such as NYC Local Law 97).

- LIBOR to SOFR transition. Pricing fixed-rate conduit investments remains a question as the industry explores both SOFR swaps and treasuries.

Topics at the January conference also included innovations or metamorphosis in CMBS, SASB and CLOs and what it means for relative value. Generally investors are looking for opportunities with a desire to see more risk in the product—where they can put their credit experience to work to uncover relative value of additional yield that works for the IG community.

Looking ahead this year IG investors anticipate opportunities will come from innovation in the market, perhaps from 5 year fixed rate or more risk to analyze. Challenges certainly will be ESG standardization and how local laws will affect real estate.

To join the IG Bondholders Forum, please register here. For any forum related questions, please contact Kathleen Olin.

Submit Nominations for Forum Chair-Elects
CREFC is seeking nominations for Chair-Elect for each of our industry sector Forums to serve during the June 2021 – June 2022 term. Please submit nominations through the survey link. You may submit multiple nominations by taking the survey multiple times. If you cannot access the survey, please email your nomination to your forum leader or Kathleen Olin. Please submit nominations no later than February 28, 2022.

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