GSPartners
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Volume XV | No. 45 | December 12, 2007
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KEY RATE INDICES
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Prime Rate
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7.25%
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1 Month LIBOR
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5.20%
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5 Yr US Treasury
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3.54%
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5 Yr Swaps
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4.39%
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12-MAT
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4.66%
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3 Month LIBOR
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5.11%
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10 Yr US Treasury
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4.15%
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10 Yr Swaps
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4.84%
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11th Dist COFI
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4.23%
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6 Month LIBOR
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4.96%
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30 Yr US Treasury
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4.60%
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| | | Transaction Description: | | $10,300,000 (68% LTV, Non-Recourse) for the Refinance of a Flex-industrial Complex in Placentia, CA. GSP secured financing for a very experienced property owner/developer for the refinance of a flex-industrial complex totaling 117,980 SF in Placentia, CA. |
Challenge: This financing took place in the midst of the market downturn, when many lenders could not provide certainty of execution. Additionally, this borrower sought significant cash out as the building value had appreciated well beyond the amount of their existing debt. |
Solution: GSP obtained an extremely competitive quote from a portfolio lender who honored the terms of their original term sheet. GSP secured a loan amount which resulted in significant cash back to the borrower after the repayment of their old financing. |
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| | | Hot Money | Must Act Quickly to take advantage of this program. CMBS lender will rate lock at 10 Year T + 2.25% for well underwritten transactions. (80% LTV, 1.20 DCR based on 30 year amort). This is a major originator that has earmarked funds for this program. Must rate lock by year end.
| | | | Up to Five Years Interest Only, No Prepayment Penalties. Relationship lender providing senior loans – permanent, bridge and hybrid financing. No impounds. Lending in primary and secondary markets in the Western US. Borrower-focused – will finance challenged properties with strong sponsors. Generally recourse, but will consider non-recourse for the right transaction. | | Transaction Size: $1-20M | | Rate: 6-7% | | Loan Term: up to 15 yrs | | Amort: I/O up to 5 yrs | | Max LTV: comm: 75%; multifamily: 80% | | Min DCR: comm: 1.25; multifamily: 1.15 | | Recourse | | Prepayment: Open | | Fees: Par – 1% | | Geography: Western US |
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| | | Interest Rate Update | Fed “seesaw” in the last 24 hours. The markets had “priced in” a 0.25% - 0.50% cut before the Dec 11 meeting. When the Fed only cut 0.25%, equity markets crashed and the bond market rallied on a flight to quality as investors feared the Fed didn’t act “strongly” to help stave off further overall credit woes. The 10 Year T dove under 4.00%. The next morning, the Fed announces it is joining with the central banks of Europe, Canada, Switzerland and Britain to set up a temporary “auction” for banks to obtain funds. This is a major international liquidity “event” and the equity markets are rallying: flight out of quality leaves the T at about 4.15% on the morning of December 12. The central bank alliance is reminiscent of the summit meeting of the US Investment Bank CEO’s during the 1998 debt crisis. Will it have the same positive effect on the markets? LIBOR: 30 Day LIBOR has spiked to 5.25%, up from 4.70% last month. Why? For at least the last nine years, expiring contracts cause this spike annually in late November and early December. LIBOR usually drops back down early in the following year. However, these aren’t “usual” times. Stay tuned… (David R. Pascale, Jr.) | | | Join Us As We Reach New Heights | At George Smith Partners, we are looking to expand our team of top-notch mortgage brokers – originators and assistants. We offer highly competitive compensation and an excellent environment in which to work, learn and be supported. GSP is committed to providing our employees with cutting edge market information, resources for identifying the best capital sources for each transaction, training opportunities and peer support whenever it is needed.
We invite you to consider a career with George Smith Partners. 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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