GSPartners
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Volume XV | No. 28 | August 8, 2007
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KEY RATE INDICES
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Prime Rate
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8.25%
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1 Month LIBOR
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5.33%
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5 Yr US Treasury
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4.68%
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5 Yr Swaps
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5.29%
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12-MAT
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4.98%
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3 Month LIBOR
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5.36%
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10 Yr US Treasury
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4.84%
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10 Yr Swaps
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5.52%
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11th Dist COFI
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4.28%
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6 Month LIBOR
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5.28%
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30 Yr US Treasury
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5.00%
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| | | Transaction Description: | | $5,000,000 Fixed-Rate Financing for a Single-Tenant, Non-Credit Grocery Store with no Operating History. GSP arranged 10 year financing with 5 years of Interest Only payments for a non-credit grocery store located in a great in-fill, Southern California location. The Sponsor purchased the asset in 1998 with a lease to Ralph’s. Since the building is approximately 20,000 square feet, smaller than the typical Ralph’s floor plate, the Sponsor negotiated a buy-out of their lease last year and re-tenanted the space at a much higher rent. The lender also waived all leasing and operating reserves. |
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| | | | Lenders Still Quoting Fixed Rate and Floating Rate Loans. With all of the turmoil in the securitized lending world, many lenders are stepping up and showing their ability to hold spreads in order to protect their relationships and reputations. GSP has seen a steady flow of lenders coming to our office to assure us that they are still quoting, and to the best of their ability, honoring quotes, especially if the rate has been locked. Though MAC (market adverse change) clauses in most loan documents would allow them to widen spreads, some lenders are not utilizing them in order to keep clients and separate themselves from the masses. We at George Smith Partners have relationships with these lenders and are eager to give them the opportunity to show us what they can do in this market. | | Transaction Size: $2-25M | | Rate: T + 1.40-1.90% | | Loan Term: 3-5 yrs typically, some may go 7-10 yrs (many programs are 5 yrs fixed, then floating) | | Amort: 25-30 yrs (30 yrs only for “best” transactions) | | Fees: Par | Recourse: Non recourse may require higher spread on full leverage
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| | | Interest Rate/CMBS Update | Treasuries: The flight to quality has continued even during today's "do nothing" Fed announcement and the 10 Year T sits at 4.75%. The bond market is once again closely watching daily economic reports for signs of inflationary or "cooling" statistics. The consensus is that the Fed will cut rates if the subprime/housing woes hamper economic growth. CMBS: More difficulties in CMBS as spreads continue to widen. We are seeing quotes with a "2 handle" (ie at least 200 over the Treasuries) for the first time in many years. Break even is "around 190." Some lenders are suggesting new application language to make sure that borrowers understand the volatility. Floating rate spreads for securitized and "CDO" lenders have widened 50-100 basis points. Stay tuned... (David R. Pascale, Jr.)
| | | Join Us As We Reach New Heights | George Smith Partners is in the midst of a record-setting period of growth. As we continue to reach new heights, we are selectively seeking several seasoned and successful financial professionals to join our team. Please direct confidential inquiries to Todd August, Chief Operating Officer, at (310) 557-8336, Ext. 125.
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©2007 George Smith Partners, Inc. FINfacts is an ePublication of
George Smith Partners, Inc. For Promotional Purposes Only. All Rights Reserved.
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