Distress Up in Nearly Half of Top CRE CLO Issuers
This week, the CRED iQ research team revisited our commercial real estate collateralized loan obligation (CLO) rankings analysis. Our inaugural report was published March 1, and our research team explored aggregated data by issuers to uncover opportunities and risks within this hot sector.
We wanted to understand the percentage breakdown of delinquency and overall distress within these major CRE CLO issuers’ portfolios and then measure the scale of those portfolios and their associated rankings within the group. Some core measures of our study include the current outstanding deal balance, total delinquency rates and CRED iQ’s overall distressed rates.
With updated April 30 remittance data, CRED iQ evaluated the top 20 CRE CLO issuers and their performance. Nine of the 20 issuers saw increased levels of delinquency, including Ready Capital, Varde Partners, Argentic and MF1, while another nine, including Greystone, Acre, Starwood (STWD), TPG and Arbor, saw reduced delinquency percentages. Another two issuers remained flat over the period: Fortress and Prime.
Ready Capital and Varde Partners carried the highest overall delinquency percentages of all issuers at a whopping 18.9 percent and 18.7 percent, respectively, with Fortress not far behind at 15.5 percent.
Ready Capital’s delinquency jumped from 7.9 percent to 18.9 percent since our original analysis from March 1, which used January data. Varde Partners’ delinquency rate also surged from 6.2 percent to 18.7 percent.
On the positive side, Ladder Capital and Blackstone logged delinquency percentages of 0 percent with LoanCore Capital at sub 1 percent.
By factoring special serviced loans, along with any loan that is 30 days past due or worse, CRED iQ calculates an overall distress rate. Ready Capital, Varde Partners, Fortress, Starwood and Argentic have the highest rates of distress with these factors.
MF1 continued its reign atop the current deal balance outstanding ranking with $11.4 billion, followed at a distance by Arbor, FS Rialto, Benefit Street Partners and Ready Capital.
Mike Haas is founder and CEO of CRED iQ
