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KCP Releases Special Report: Robert C. Morgan – CMBS Exposure Update
mercredi 29 mai 2019, 21:02 , par Digital Pro Sound
NEW YORK–(BUSINESS WIRE)–Kroll Bond Rating Agency (KBRA) releases its Robert C. Morgan – CMBS
Exposure Update special report, in which we examined the latest developments in the ongoing investigation of Robert C. Morgan and affiliated entities and the resulting impacts to CMBS transactions with exposure to Robert C. Morgan. On May 22, 2019, the US Attorney’s Office for the Western District of New York issued a press release announcing a 114-count superseding indictment charging four individuals, including 46 counts against Robert C. Morgan himself, with conspiracy to commit wire fraud and bank fraud. The indictment states that the object of the conspiracy was to induce financial institutions to issue mortgage loans based on false pretenses and to provide false information to mortgage loan servicers to conceal such misrepresentations for personal gain. The superseding indictment came several days after the COO of Morgan Communities and Morgan Management, Scott Cresswell, pleaded guilty to fraud charges that implicated Robert C. Morgan’s involvement in an insurance fraud conspiracy. Concurrent with the criminal charges against Robert C. Morgan, the Securities and Exchange Commission (SEC) filed an emergency action charging Morgan with defrauding investors with a Ponzi-like scheme related to two of his entities, Morgan Mezzanine Fund Manager LCC and Morgan Acquisitions, LCC. The civil charges include requests by the SEC to freeze Morgan’s assets and appoint a temporary receiver over the relevant investor funds. Permanent receivership is being sought over the entities named in the complaint as well as permanent injunctions. The SEC complaint also requested final judgments ordering Morgan to disgorge ill-gotten gains and pay civil monetary penalties. KBRA Credit Profile (KCP) has been monitoring the Robert C. Morgan investigation since the fall of 2017 at which time we published a special report examining CMBS exposure to identify more than 150 loans affiliated with Morgan and related entities as a sponsor. KCP published updates on the investigation in May 2018 and December 2018 highlighting, among other developments, loans that transferred to special servicing and loans that were secured by properties specifically referenced in the May 2018 indictment. The superseding indictment re-alleges conspiracy charges in connection with the properties originally named in the May 2018 indictment and requires forfeiture of the assets upon conviction. KCP identified six CMBS transactions with exposure to properties that would be subject to forfeiture in the event of a conviction. As of the May 2019 remittance period, a total of five loans with an aggregate unpaid balance of $134.3 million have transferred to the special servicer. As the criminal and civil cases against Robert C. Morgan progress, we will continue to monitor the proceedings with regards to potential asset forfeitures as well as the workouts for loans with the special servicer. We will incorporate any developments as we complete our monthly analysis for each of the respective transactions. Our updated Robert C. Morgan exposure list identified 170 loans totaling $1.79 billion across 81 transactions. Approximately 58% of the exposure by balance, or $1.04 billion, comprises loans securitized across 35 Freddie K transactions. The remaining balance of $747.7 million (42%) is made up of loans securitized in 46 post-crisis conduit transactions. For subscribers of the KCP platform, an updated loan list as of May 2019 is available by clicking here. To access the full report, click here. The KCP platform is a subscription-based surveillance service that covers roughly 1,000 commercial real estate (CRE) securitizations with an aggregate balance of over $600 billion. For each deal, monthly reports are posted to our website that contain color and commentary for CMBS transactions and their underlying loan collateral. Unlike other sources of valuation and loss data, which primarily rely on models, the service is supported by a dedicated team of analysts, who can more readily appreciate the non-homogeneous nature of CRE, loan, and transaction structures, as well as imperfect servicer information. Related Publications: KCP Special Report: Robert C. Morgan Developments- Guilty Plea and Special Servicing Transfers (December 2018) KCP Special Report: Robert C. Morgan Update (May 2018) KCP Special Report: Robert Morgan & Morgan Companies – CMBS Exposure (October 2017) CONNECTWITH KBRA TwitterLinkedInDownload the iOS AppYouTube About KBRA and KBRA Europe KBRA is a full-service credit rating agency registered with the U.S. Securities and Exchange Commission as an NRSRO. In addition, KBRA is designated as a designated rating organization by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized by the National Association of Insurance Commissioners as a Credit Rating Provider, and is a certified Credit Rating Agency (CRA) by the European Securities and Markets Authority (ESMA). Kroll Bond Rating Agency Europe Limited is registered with ESMA as a CRA. Contacts Analytical Contacts: Daniel Levit, Analyst(215) 882-5891dlevit@kbra.com Marc McDevitt, Director(215) 882-5857mmcdevitt@kbra.com Steve Kuritz, Senior Managing Director(215) 882-5866skuritz@kbra.com
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mar. 30 avril - 00:12 CEST
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