Some investors are grousing that Standard & Poor’s recently re-tooled ratings criteria for US CMBS transactions revise the calculation of a key credit metric in such a way as to relax ratings standards in order to help the agency win back market share.
S&P is using lower capitalisation rates than before, abandoning its previous “stressed” view of cap rates and opting for an “expected-case” approach.
“S&P introduced something that sounds nice to investors but in reality, it introduces a level of volatility beyond property fundamentals, and beyond price,” said Nilesh Patel, a managing director at Prima Capital Advisors, an investment advisory firm specialising in high-quality CMBS
Read more...CMBS investors decry S&P changes | Top News | IFRAsia
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