fbpx

KBRA Releases Research – As Freddie Mac K-Series Defeasance Accelerates, Supplemental Debt Slows

NEW YORK–(BUSINESS WIRE)–Kroll Bond Rating Agency (KBRA) releases a new report, As Freddie Mac K-Series Defeasance Accelerates, Supplemental Debt Slows, which discusses the meaningful increase in loan defeasances that we have observed among Freddie Mac K-Series transactions, as well a decline in supplemental debt placements.

The pickup in defeasance volume is not surprising, as the U.S. is well into its longest economic expansion in history, with 121 consecutive months of GDP growth. While the unpaid principal balance rose 86% year-over-year (YoY) to reach an all-time high of $3.86 billion in year-to-date (YTD) April 2019, supplemental debt was down 36% YoY to $254 million. This compares to $2.08 billion and $395 million, respectively. With the expansion long in the tooth, borrowers and/or Freddie Mac may have turned more cautious in taking out some of a property’s equity with supplemental debt. In certain markets, rent growth may have slowed and property operating performance, based on Freddie Mac’s re-underwriting, may not have been supportive of additional debt.

The analysis included rated 5-, 7- and 10-year K-Series deals as of April 2019 which had fixed rate loan collateral. In total, KBRA reviewed 114 transactions with a current unpaid principal balance of $144.3 billion (7,945 loans). Within the deal population, $19.4 billion of mortgage collateral was defeased and $7.04 billion of supplemental debt was placed since February 2011.

To access ratings, reports and disclosures, click here.

Related Publications: (available at www.kbra.com)

CONNECT 

WITH KBRA

Twitter 

LinkedIn 

Download the iOS App 

YouTube 

About KBRA and KBRA Europe

KBRA is a full-service credit rating agency registered with the U.S. Securities and Exchange Commission as an NRSRO. In addition, KBRA is designated as a designated rating organization by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized by the National Association of Insurance Commissioners as a Credit Rating Provider, and is a certified Credit Rating Agency (CRA) by the European Securities and Markets Authority (ESMA). Kroll Bond Rating Agency Europe Limited is registered with ESMA as a CRA.

Contacts

Analytical:

Larry Kay, Senior Director

(646) 731-2452

[email protected]

Giselle Vuong, Senior Analyst

(646) 731-2435

[email protected]

Eric Thompson, Senior Managing Director

(646) 731-2355

[email protected]

leverton

I have been involved with publishing and marketing for the past 37 years. My passion is helping people share their voice. I am able to do this through two important venues: One, with Area-Info.net where people can share everything from opinions to events to news. It is your choice! What do you want to share? Two, through a new program called America's Real Deal I am involved with to help business owners get their voice heard. For people who love to save money and earn while saving, there is a new program called the r network. You are provided with a card that entitles the user to automatic savings on more than 300,000 products. Learn more about the revv card today. This is by invitation only to be some of the first people to get this card. I schedule speaking engagements with community groups and business groups to share my passion about the importance of "sharing your voice". Contact me directly at [email protected] for scheduling information.

You May Also Like