Sector developments and company hires

Canadian CMBS forbearance highlighted
As of the June 2020 remittance reports for the Canadian conduit CMBS sector, 48 loans totalling C$559.9m were on the servicer's watchlist for coronavirus-related relief, according to DBRS Morningstar. In most of these instances, the servicer’s commentary confirmed that borrowers were granted loan modifications and/or forbearances.

The majority of these loans are secured by retail properties, representing 64.4% of the loans on the watchlist for coronavirus-related reasons, while hospitality properties represented 14.6% of those loans.

As of the June 2020 remittance, six loans totalling C$47.8m were in special servicing, with a total of eight loans (C$70.9m total balance) flagged delinquent and showing a past due payment status. These figures represented a delinquency and specially serviced rate of 1.4%, compared with the May 2020 delinquency rate of 3.7% and the June 2019 rate of 0%.

Four of the specially-serviced loans are secured by Calgary office properties that are sponsored by Strategic Group, which last year filed for protection under the Companies' Creditors Arrangement Act for debt on 50 of its 171 commercial properties (SCI 20 December 2019).

EMEA
Cadwalader, Wickersham & Taft has recruited Matthew Duncan as a partner in its London capital markets team. Duncan has experience in an array of financings, including structured finance and Islamic/Shari'a transactions. He joins the firm from Morgan Lewis, where he was a partner.

Rolf Caspers has been named global head of capital markets at SANNE, based in Luxembourg. He joined the firm in June 2014 as head of SANNE Group Luxembourg and was promoted to md in June 2019. His previous role was head of corporate services Luxembourg at Deutsche Bank.

Mortgage delinquencies improve
After rising from 3.2% in January to 7.8% in May, Black Knight data suggests that the US mortgage delinquency rate has improved for the first time in five months, falling to 7.6% in June as the overall number of past-due mortgages declined by 98,000. However, serious delinquencies – those 90 or more days past due – rose by more than 1.2 million, as the initial wave of borrowers financially impacted by Covid-19 missed their third mortgage payment. At 1.87 million, the number of seriously delinquent mortgages is now at its highest level since early 2011.

North America
Rohit Bharill has been appointed head of risk at Cadence, based in New York. He was previously head of ABS and CLOs at DBRS Morningstar and before that worked at Moody’s, Nomura and Lehman Brothers.

REIT to become self-managed
Two Harbors Investment Corp has provided PRCM Advisers with a notice of termination of the management agreement between the two companies for cause, on the basis of the latter’s material breaches of the agreement and gross negligence in the performance of its duties. The notice of termination specifies that the management agreement will terminate on 14 August and that no termination fee will be payable in connection with the termination. Following the termination of the management agreement, Two Harbors will become a self-managed company.