The news that Starz Real Estate has successfully brought to market Europe’s maiden CRE CLO can be considered a seismic event for the European commercial real estate (CRE) lending market.
For commercial mortgage-backed securities (CMBS) investors and other fixed income investors that have an appetite for structured products pegged to the performance of CRE, the emergence of this new asset class will be a mouth-watering proposition. After all, these structures are primed for exponential growth in the years ahead. Broadly speaking, a CRE CLO is a capital markets' instrument created by the securitisation of loans secured by CRE. More specifically, as with CMBS, this entails a shell company acquiring a bunch of CRE loans that it finances through the issuance of rated notes in...
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