B-Piece Buyer Role

Temujiin's picture
Rank: King Kong | 1,286

What is the type of role at a Rialto that analyzes and purchases the B-Piece of CMBS and Freddie-K securities?

EDIT: I mean at a company like Rialto, not them specifically.

Comments (5)

Feb 13, 2020

I read (on this forum) that people from all over the company help underwrite the B pieces. Like you have your job + helping out with underwriting deals. This is a quote from a comment you can find if you search for Rialto on here - don't take my word on it

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Feb 13, 2020

Rialto can't buy k-deal b-piece....they are not qualified

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Feb 17, 2020

by not qualified, i'm assuming he means Rialto is not one of the DCHs (Directing Certificate Holder) which is a status given by Freddie Mac once they deem the firm capable of being a B-Piece holder for Freddie K series..in fact even in a secondary market the new buyer must have DCH status to buy the B Piece

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Feb 17, 2020

i believe there was recent post related to this topic where i saw some legit comments explaining what you do as a b piece investor so i recommend checking that out; my exp is currently limited to Freddie K series so let me give you an idea based on the K series, if ur purchasing b piece at origination, you do your own due diligence on the pool of assets making sure whoever was the initial lender for that loan underwrote it properly; if you find loans that were not properly underwritten, you may ask them to be kicked out of the pool; daily roles as member of b piece team may include visiting each asset, projecting cash flows and running various downside scenarios for loans of concern, other DD such as background check on the various sponsors of the loans, reps and warranties exceptions, etc, preparing committee memo, leveraging equity platform to get those guys' take on the assets (since as B piece investor you may end up owning those assets and managing them), etc of course, different firms go about the process differently and i know some firms are much more lax on the whole DD process

Feb 17, 2020
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