First National offers competitive, turnkey defeasance services. Because we are familiar with the intricacies of the Canadian market, we are better able to identify and resolve issues within our own market. As a Canadian Primary, Master and Special Servicer of mortgages, First National has been actively involved in the CMBS market and we have been participating in defeasance transactions since 1998.
We manage all aspects of the defeasance process so clients can concentrate on the sale or refinance of real estate assets.
Our extensive experience in mortgage servicing and in defeasance allows us to:
Working with First National ensures that your sale or refinance is completed on time to meet your needs.
- anticipate issues before they arise;
- plan your defeasance transaction;
- buy the lowest cost eligible securities to defease your loan.
Defeasance is the process of substituting one type of collateral for another. Borrowers replace their real estate collateral with a portfolio of government-backed securities. This portfolio is structured so that the proceeds generated from the securities is sufficient to cover all of the remaining debt service payments on a Commercial Mortgage Backed Securities (CMBS) loan.
Defeasance gives borrowers the flexibility to sell or refinance their mortgaged property when their loan has been sold into securitizations.
Our team of Canadian experts will manage both the economics and logistics of the defeasance process on your behalf.
We have an extensive network of relationships with top Canadian attorneys, accountants and other service providers so you benefit from pre-negotiated fee arrangements. Through these established relationships, we are able to provide you with seasoned advisors for every aspect of the process.
Our long-standing relationships with Canada's largest investment dealers, coupled with our proprietary models for securities selection, ensure we minimize costs by selecting the most efficient combination of eligible collateral, including government bonds, coupons and residuals. This results in a portfolio in which receipts from securities are closely correlated to loan payment schedules. At First National, we work hard to make sure your transaction costs are minimized.
First National will assign a dedicated Canadian Account Manager who will work to understand your requirements and be available to answer your questions. They will manage all aspects of the defeasance transaction and keep you informed at every stage including:
- coordinating and manging all participants to ensure a timely closing;
- obtaining all necessary third party opinions and reports; and
- working with our team to identify and arrange the purchase of the lowest-cost portfolio of eligible securities.