Market updates and sector developments

Scope is calling for comments on a proposal to update its CRE loan and CMBS rating methodology. The proposed changes are expected to affect existing ratings assigned by the agency by up to two notches on the upside and four notches on the downside.

Most notably, the proposal introduces a scoring framework for determining assumptions and the rateability of construction and refurbishment CRE transactions. Other adjustments include amendments to Scope’s all-in refinancing rate framework and foreclosure assumptions, as well as its illustrative rental value haircuts, property and vacancy costs and capitalisation rates.

Comments on the methodology should be submitted by 19 October.

In other news…

ICE and DeltaTerra form joint venture

Climate-focused investment consultancy DeltaTerra Capital and Intercontinental Exchange (ICE), the owner of mortgage loan origination system (LOS) Encompass, have launched a joint venture providing climate-adjusted credit risk analytics for RMBS and CMBS. The platform will provide insights at the property, loan, deal and bond levels, producing estimates of potential changes in the value of real estate and MBS “directly attributable to climate risk”, the companies say.

The joint venture comes two weeks after ICE completed the acquisition of its top competitor Black Knight, which owns the second largest LOS in the US, Empower (SCI 7 September). The business has also bolted on Ellie Mae, Simplifile and Mortgage Electronic Registrations Systems in recent years, as it looks to build out its mortgage technology division.