Best Way to Negotiate with Lenders
I have a few troubled assets with floating rate loans that need some workout. A few are CMBS, a few are agency, and a few are with balance sheet lenders.
I'm having trouble getting the CMBS and Agency loans to come to the table to discuss loan relief. We reach out, but we either don't get a response or we don't get their focus / attention. We don't want to default on the loan, but it may be the best way to get lenders to the table.
Anyone else dealing with this and what's the best course of action?
What reason do they have to come to the table? How far underwater are your loans?
Ideally, you should figure out what they want, and try and craft a compromise that gives it to them. Maybe that means extending an I/O period in return for an equity infusion to delever the asset. Or a lower rate. Obviously only you know the state of your loans, but brinksmanship (threatening default) is probably not the best idea. I mean, look around - these guys probably have a dozen other borrowers doing the same damn thing. It can be easy to forget that, when your stuff is sinking faster than the Titanic, but you're not the only client and probably not even their biggest/most distressed client; your lenders may have other priorities, so another fucking headache of a borrower isn't what they're going to want. They're going to want someone who proposes a low cost, low headache solution that allows them to focus on the deals that don't have that easy answer.
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