Execution

Defeasance Group manages the entire defeasance process including:

• Coordination with:
  • Rating Agencies
  • Accountants
  • Custodians
  • Attorneys
  • Wall Street dealers to optimize securities portfolios

We will bring together and work with each piece of the defeasance process comprised of the following professionals:

• Accountant – A nationally recognized independent certified public accounting firm is required to provide written verification to the trustee pursuant to legal documents and rating agencies requirements, which compare the sufficiency of the future cash flow from the Defeasance Securities to the remaining payment obligations for the defeased loan.
• Borrower’s Counsel- the original borrower’s legal counsel.
• Custodian- the bank which holds the Securities that are pledged for the loan that has been defeased.
• Escrow Agent – records the release of the real property once the Securities have been purchased and subsequently transferred to the custodian.
• Rating Agency – a defeasance may require Standard & Poor’s, Moody’s and Fitches approval (technically a no-downgrade letter) if the size of the loan being defeased or the percentage of collateral it represents in the CMBS meet certain requirements.
• Servicer – the Servicer of the CMBS which holds the loan. The Servicer represents the interests of the Lender, is a party to all the Defeasance Documents, and in large part controls the process. The servicer is typically a large institution that interacts directly with the borrower pursuant to a pooling and servicing agreement.
• Successor Borrower – the successor borrower will, upon defeasance, replace the borrower by assuming the loan obligations. The successor operates solely to hold the Securities to repay the loan.