The Voice of Commercial Real Estate Finance



Since the Global Financial Crisis, the European commercial mortgage-backed securities (CMBS) market has struggled to re-establish itself as a core component of the wider CRE debt landscape.  Challenging regulatory treatment under Solvency II has no doubt contributed to low issuance volumes, which themselves limit demand.  We have been pleased so see improved levels of market activity over the course of 2018 and 2019 and are reacting to them, including by planning a CMBS and CRE capital markets focused conference for May 2020 (please contact Carol Wiklie or Peter Cosmetatos for further information).

Over the course of the last year or two, our regulatory focus has been on the development of the disclosure regime for all securitisations issued after the end of 2018 by ESMA, the European Securities and Markets Authority.  We have worked hard to ensure that the reporting templates relevant for CRE debt securitisations work.  The relevant technical standards were adopted by the European Commission in October 2019.

CMBS 2.0

CREFC Europe is convinced that Europe, its real estate markets and financial stability would be well served by a healthy and sustainable CMBS market . It was to that end that, in November 2012, we published Market Principles for Issuing European CMBS 2.0, a paper produced by a CREFC Europe committee chaired by Nassar Hussain, Brookland Partners.

The CMBS 2.0 committee had been formed in May 2011 to help CMBS market participants learn from the crisis and develop practices and standards for new CMBS issuance. The committee’s market principles brought together the contributions of working groups covering:

  • pre-issuance disclosure
  • excess spread structures
  • improved investor reporting
  • transaction structure features and issues
  • servicing and transaction counterparty roles
  • investor identification

European Investor Reporting Package (E-IRP)

In 2004, CREFC Europe formed this committee to create a transparent and standardised bond, loan and property level reporting package for European CMBS transactions, the E-IRP. Since the release of version 1 of the E-IRP templates in 2005, the committee has been responsible for maintaining and updating them.

E-IRP version 2.0, released in 2011, was used by the Bank of England and the European Central Bank as a basis for developing their respective CMBS loan level reporting requirements for their ABS collateral programmes.  It was also adapted to create the CMBS template used by the European Data Warehouse.

In August 2013 the committee released watchlist criteria as part of the E-IRP to promote consistent flagging by servicers of loans that may be running into difficulty.

We led some efforts to continue updating the E-IRP not only for recent market developments, but to align it with emerging regulatory reporting templates, but were overtaken by regulatory events and the ESMA disclosure templates discussed above.

Please contact Peter Cosmetatos for further information.