Underwriting Process
- A typical CMBS "conduit" or "large loan" underwriting contains the following:
- Aqua Investment Management reviews deal term sheet, prospectus and data tape.
- Aqua Investment Management reviews overall deal characteristics and metrics.
- Aqua hosts deal issuer for a "road show" to review top 15 to 20
loans in great detail.
- Aqua reviews all property-level and loan-level characteristics
of every loan in the transaction.
- Aqua reviews and adjusts projected cash flows of every property
in the transaction.
- Aqua performs default-loss analysis to determine projected
principal loss in the transaction.
- Aqua Investment Management provides risk-adjusted capital structure to client, based on
default-loss analysis, to determine best area of the capital structure
to target for investment.
- A typical B-Note / Mezzanine Loan / Whole Loan underwriting contains the following:
- Aqua Investment Management reviews executed term sheet, 3rd party documents, loan documents
and operating statements.
- Aqua Investment Management does a standard search on tenants.
- Aqua Investment Management conducts physical inspection of the asset.
- During this visit, Aqua Investment Management meets with property manager and leasing agent
and performs detailed market research.
- Aqua Investment Management reviews Lender cash flow underwriting and re-underwrites per set
parameters based on property type, location and property / market research.
- Aqua Investment Management reviews participation / intercreditor documents and engages legal
counsel as necessary.
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