Friday, April 17, 2009
GGP Bankruptcy Snares CMBS Assets
--Sarika Gangar
General Growth Properties, which filed for bankruptcy on Thursday (16 April), is attempting to claw back a number of commercial property loans that have been securitized by pulling them into its filing. The move surprised market participants because commercial mortgage-backed securities deals are set up as bankruptcy-remote, special purpose entities. GGP owns over 200 properties, 158 of which were included in the bankruptcy. Of the 158, roughly 90 are held within CMBS and CRE CDOs. These deals have mortgages with outstanding balances of about $9.5 billion.
A bankruptcy-remote entity is supposed to...
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