--Adverse market conditions that interfere with BCP's ability to meet target amortization levels and/or refinance the balloon maturity
in 2024, particularly if leverage exceeds 8x.
Morningstar cited a large number of loans that are current but may default in coming months since they may not be able to secure adequate take-out financing at balloon maturity
The delinquency rate is expected to rise in coming months, however, as the 2007 vintage loans that were originated under the weakest underwriting standards start to reach their five-year balloon maturity
The loan transferred to special servicing in May 2015 for balloon maturity
default after the borrower was unable to refinance the loan due to occupancy declines.
We also cannot rule out additional store consolidation, closings and potential bankruptcies along with growing balloon maturity
default risk as retail collateral continues to suffer from the experienced decline."
The term facility provides for rapid deleveraging in the base case with strong prospects for refinancing the balloon maturity
even if revenues are reduced and interest rates rise.
Unlike ARMs - another low-cost alternative to fixed-rate mortgages (FRMs) - a borrower's monthly payments are known with certainly, out until the balloon maturity
date, from the moment the loan is originated.
Pro forma MADS of $46.2 million, which includes a $15 million balloon maturity
in 2029, consumes a high 10% of fiscal 2015 operating revenues.
Five loans (54%) are fully amortizing and one loan has a balloon maturity
MANAGEABLE DEBT BURDEN: UST's maximum annual debt service (MADS) burden is high when including a balloon maturity
in 2022 on a commercial real estate loan.