Anyone have an idea of what is happening with the bridge/CLO loans that are starting to mature for most of the value add multi deals?
Now that we're about to be in the thick of all that 2-3 year initial term for many of those multi sunbelt deals that were issued in end of 2020 and 2021, how are the lenders working them out? Assuming most of them aren't meeting DSCR/DY test to extend, are the lenders just waving them and putting all these crumby deals into special servicing?
Realistically how many loans can these CLO shops do this to? If half or even more of the trust is facing a maturity in the next ~6 months and don't meet the requirements to extend, or even can't afford the rate cap etc. what are these lenders going to do?
I can't speak broadly, but I suspect it is really, really bad. Looking a deal with a 2021 origination right now. Value is +/- 90% of par on the debt. Equity is totally wiped.
Maybe 70% of principal value!
I have heard of an A B note split but that doesn’t do anything besides push the problem out months or a year.
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