Chicago (Crowne Plaza Metro) Real Estate Finance Mortgage and Mezzanine in the Capital Markets: The Risks and Rewards of CMBS and CDOs

Transcription

1 Ninth Annual Advanced Course of Study/Audio Webcast Chicago (Crowne Plaza Metro) May Commercial Securitization for Real Estate Lawyers Real Estate Finance Mortgage and Mezzanine in the Capital Markets: The Risks and Rewards of CMBS and CDOs Sponsored with the cooperation of The Capital Consortium, including: Commercial Mortgage Securities Real Estate Roundtable Association Securities Industry and Financial Mortgage Bankers Association Markets Association National Association of Realtors Thursday-Friday, May 3-4, 2007 on site in Chicago or via audio webcast in your office audio webcast available in its entirety or in 4 half-day segments plus written course materials audio mp3 CD-ROM PDFs of materials and access to streaming online audio (available for purchase and immediate download online at about four to six weeks after the course) FREE online access to the archived program for registrants Also available as a LIVE audio webcast at your desktop! See within for details.

2 Commercial Securitization for Real Estate Lawyers :: May 3-4, 2007 WHO WILL BENEFIT FROM THIS COURSE? Lawyers involved in every aspect of real estate finance: not only those representing mortgage and mezzanine borrowers, lenders, and underwriters, but also those representing owners and tenants. Even if the transaction is a traditional portfolio mortgage loan that will not immediately be included in a pool and securitized, lenders today view securitization as a potential exit strategy and require that loan documentation be suitable for securitization. As a result, securitization issues and requirements affect nearly every mortgage and mezzanine loan and, concomitantly, the transfer and leasing of commercial real estate. Securitization is now a significant part of the real estate debt and equity markets. Conduit lenders are competing aggressively with traditional portfolio lenders for loans, and new rules apply to the negotiation and documentation of commercial mortgage and mezzanine loans. Real estate finance, once a local or regional business, is now an integral part of global capital markets. Mortgage and mezzanine finance borrowers now have many choices available for public or private securitized or non-securitized debt. Although securitization has provided access to new sources of capital, periodic turmoil in the capital markets demonstrates that securitization is not without risk. The growth of the mezzanine finance market and the development of collateralized debt obligations (CDOs) are having a significant effect on borrowers and lenders. As a result, borrowers and their counsel must carefully consider the advantages and disadvantages of each financing choice. This annual advanced course of study, comprising 12 full hours of instruction, is designed for real estate lawyers who need a better understanding of the basic elements of the securitization revolution. It answers many of the questions commonly asked: What is negotiable? What is not? What will it cost my client? What do the rating agencies really require? How do I protect my client against volatility in the capital markets? What happens if the lender or servicer encounters financial difficulty? What if the market changes or my client defaults? To whom do I talk if there is a problem, a default, or a change in circumstances requiring an amendment to the documents? The course also includes a discussion of workout and bankruptcy issues. Many securitization structures have yet to be tested in a down market. Are securitization structures too rigid and inflexible to survive a downturn in the market? What is the impact on the growth of the Capital Stack B-notes and mezzanine debt? Who is the lender? To whom can the borrower talk about a workout situation or a change in the documents? What is the role of the servicer? What power and discretion does the servicer have? What happens if the servicer or an affiliate is downgraded or becomes insolvent? How does that affect the loan and the borrower? The course provides valuable practical tips to borrowers and lenders lawyers in the structuring and documenting of a transaction. The course also is designed to give registrants an informed understanding of today's marketplace, so that they can address client needs more efficiently and cost-effectively. Time is reserved throughout the program to address written questions submitted by the registrants. PLANNING CHAIR (also on faculty) Joseph Philip Forte, Alston & Bird LLP, New York FACULTY Darren Esser, Vice President, Wachovia Bank, New York David W. Forti, Dechert LLP, Philadelphia Joseph C. Franzetti, Managing Director, New York Credit Advisors, LLC, New York David A. Harrison, Senior Director, Derivative Fitch Ratings, Inc., Chicago Steven G. Horowitz, Cleary Gottlieb Steen & Hamilton LLP, New York David C. Miller, Sidley Austin LLP, New York Thomas F. Nealon, III, General Counsel, Lennar Partners, Inc., Miami Bola O. Oloko, Thacher Proffitt & Wood LLP, New York Daniel B. Rubock, Vice President/Senior Credit Officer, Moody s Investors Service, New York Patrick C. Sargent, Andrews Kurth LLP, Dallas Janice M. Smith, Managing Director, Bank of America, N.A., Charlotte, North Carolina Erin E. Stafford, Senior Vice President, Dominion Bond Rating Service, Chicago William C. Stefko, Alston & Bird LLP, New York Jan S. Sternin, Senior Vice President, Midland Loan Services, Inc., Overland Park, Kansas ALI-ABA Staff : Thomas M. Hennessey, Assistant Director, Office of Courses of Study

3 Commercial Securitization for Real Estate Lawyers Thursday-Friday, May 3-4, 2007 Crown Plaza Metro, Chicago also available as a live audio webcast or later as archived, on-demand audio Subscribe to The Practical Real Estate Lawyer s e-forms! Get the hard-copy magazine plus online access to editable versions of all the forms and checklists from each issue! One year (6 issues): $75 Two years (12 issues): $119 For more information or to subscribe, see the order form or go to Stay current with this how-to-do-it real estate magazine. Free ALI-ABA online Business & Corporate Law American Law Institute-American Bar Association Continuing Professional Education 4025 Chestnut Street, Philadelphia, PA NONPROFIT ORG U.S. Postage PAID ALI-ABA CM100

4 :: Program :: Thursday, May 3, :00 a.m. Registration and Continental Breakfast Audio Webcast Segment A: The Commercial Mortgage-Backed Securities (CMBS) Market 9:00 a.m. Introduction and Course Overview Mr. Forte 9:15 a.m. Historical Context of Securitization Mr. Forte 9:30 a.m. Market Overview Mr. Forte, moderator; Messrs. Esser, Franzetti, Oloko, Rubock, and Stefko The aftermath of Wall Street meets Main Street ; Wall Street capital vs. traditional capital sources and its effect on the borrower; How does Wall Street financing alter the borrower s negotiations with the lender? What do the Wall Street capital markets expect from the borrower? How should the borrower evaluate financing from these different sources? 10:15 a.m. The Basics: the ABCs of Securitization Mr. Forte, moderator; Messrs. Esser, Franzetti, Oloko, Rubock, and Stefko Conduits small and medium loan programs; Large loans and portfolios of loans; The CMBS process from cradle to grave: who does what when? How to build a bond; How the subordinate tranches are calculated; Who buys each tranche of securities? What is a B piece? Pricing and structuring issues; What is a B note? How does mezzanine finance affect the market? What is a CDO? 11:15 a.m. Networking Break 11:30 a.m. The Role of the Rating Agency Mr. Forte, moderator; Ms. Stafford and Messrs. Esser, Forti, Franzetti, Harrison, Oloko, Rubock, and Stefko What exactly do they do? What do they really require? What information do they require for various types of transactions? How do they affect your transaction? What are the differences in rating CMBS and CDOs? What are the underwriting concerns and issues? 12:15 p.m. Questions and Answers 12:30 p.m. Lunch Break Audio Webcast Segment B: Creating the Securities 2:00 p.m. General Structural and Tax Issues Mr. Forte, moderator; Ms. Stafford and Messrs. Forti, Franzetti, Harrison, Miller, Oloko, Rubock, and Stefko Real Estate Mortgage Investment Conduits (REMICs); Equity kickers and classic debt vs. equity issues; Use of check-the-box partnerships; Taxable mortgage pool issues; Deemed refinancings 3:15 p.m. Corporate and SEC Issues and Concerns Mr. Forte, moderator; Messrs. Miller and Oloko Structuring the transaction; Documenting the transaction (the prospectus, pooling and servicing agreement, offering memorandum, etc.); Team approach; Due diligence issues; Time line; Representations and warranties; Special disclosure issues 3:45 p.m. Networking Break 4:00 p.m. Special Securitization Opinion Letters Mr. Forte, moderator; Messrs. Forti, Horowitz, Miller, Nealon, and Sargent What s really required for a special purpose entity bankruptcy opinion? Who can give it? What do the investors and rating agencies really want? Special opinions: nonconsolidation and true sale the outside limits of the true sale opinion, retained securities, and other unusual deal structures; Delaware single member LLC opinion; REMIC opinion; Tax issues; FASB problems for opinion given; The rule of reason and the growth of simply awful enforceability opinions 4:45 p.m. Questions and Answers 5:00 p.m. Adjournment for the Day; Networking Reception for Registrants and Faculty Friday, May 4, :30 a.m. Continental Breakfast Audio Webcast Segment C: Creating the Securitized Asset 9:00 a.m. Representing Lenders and Borrowers Mr. Forte, moderator; Mss. Smith, Stafford, and Sternin and Messrs. Forti, Franzetti, Horowitz, Miller, Nealon, Sargent, and Stefko What is a conduit? The role of mortgage brokers, mortgage bankers, warehouse lenders, and investment banks; Due diligence; Key underwriting issues; Effect of competition on underwriting; Net Operating Income (NOI) analysis; Role of traditional lenders; Key issues for the borrower; Commitment issues; Representations and warranties; Defeasance; Mortgage covenants and special escrows; Costs of negotiating the transactions; Discussions of ratable Capital Markets Mortgage form; What is negotiable? Special Purpose Vehicle (SPV) structure 10:30 a.m. Networking Break 10:45 a.m. Representing Lenders and Borrowers (continued) 11:30 a.m. Questions and Answers 12:00 noon Lunch Break Audio Webcast Segment D: Administering the CMBS Collateral Pool 1:30 p.m. Componentizing the Securitized Asset Mr. Forte, moderator; Mss. Smith, Stafford, and Sternin and Messrs. Forti, Horowitz, Miller, Nealon, Sargent, and Stefko Pari Passu (A/A) and Subordinate (A/B) Notes; Preferred equity vs. mezzanine finance; Intercreditor agreements 2:30 p.m. Representing Borrowers and Servicers after Securitization; Working Out the Securitized Loan Mr. Forte, moderator; Mss. Smith, Stafford, and Sternin and Messrs. Forti, Horowitz, Miller, Nealon, Sargent, and Stefko Role of REMIC Master, Primary (or Sub-), or Special Servicer; Pooling and Servicing Agreement; The inflexibility of CMBS servicing architecture; REMIC restrictions on decision-making; Lender consents; The role of the rating agency; Significant and insignificant modifications; Partial releases of collateral; Transfer and assumption of securitized loans; The mechanics of defeasance; Opinion requirements; What happens if a servicer or an affiliate is downgraded or files for bankruptcy? The role of the collateral manager in a CDO; Differences in recovering the CDO; Substitution of collateral in a CDO; Role of the Special Servicer, REMIC limitations, pooling and servicing agreement, operating advisor role, and B piece owner effect on workout of default loan; Servicer analysis in defaulted loan environment; Advancing cessation; Single asset securitization advancing issues; Foreclosure property in REMIC context; Capital expenditures post-foreclosure; Representations and warranties/buy back provisions; Foreclosure vs. bankruptcy vs. contractual workout; Impact of pari passu and subordinate notes; Subordinated debt; Preferred equity and mezzanine finance; Participation arrangements and other structures on enforcement; Dealing with a defaulted loan in a CDO 3:15 p.m. Networking Break 3:30 p.m. Representing Borrowers and Servicers after Securitization; Working Out the Securitized Loan (continued) 4:30 p.m. Questions and Answers 5:00 p.m. Adjournment Notes: The discussions include at least one full hour on ethics and professional responsibility issues, accepted as such by most, but not all, MCLE jurisdictions. Total 60-minute hours of instruction: 12 This course also is available as a LIVE audio webcast at your desktop (in its entirety or in 4 half-day segments)! Those who register for a single segment can opt later to take the entire course online without paying the premium for the initial segment (i.e., just pay the balance due for the full course when archived). Go to for detailed information about participating in ALI-ABA s live webcasts. For group webcasts, please Ruth Johnson at rjohnson@ali-aba.org for registration instructions and tuition discounts.

5 Register today! Return this form by fax or mail or register To register or order please mail this form together with payment to ALI-ABA: REGISTRAR, ALI-ABA, 4025 Chestnut Street, Philadelphia, PA Please attach names and addresses of additional registrants. Attend this course live in Chicago. FAX your completed coupon to ALI-ABA: (215) 243- Phone your registration or order: CLE NEWS (Please do NOT duplicate previously FAXed Register or order on the web at registrations or orders via mail or phone.) Please enter registration(s) for the ALI-ABA Course of Study, Commercial Securitization for Real Estate Lawyers. Tuition: $1,195. CM100 Attend this course live via the Internet with our audio webcast (in whole or in part). Register me for the live audio webcast ( address required). Tuition: $1,195. WAM100 Or, register me for the below segment(s) of the live audio webcast (agenda for segments available on program panel inside): webcast segment A Tuition: $299 WAM100A webcast segment B Tuition: $299 WAM100B webcast segment C Tuition: $299 WAM100C webcast segment D Tuition: $299 WAM100D Can t attend? Stay ahead with these great ALI-ABA Real Estate and Land Use products: Send an audio mp3 CD-ROM of the program, including the course materials, for $599. AM100CD Send the course materials only for $199. SM100 Register me for the ALI-ABA Online Library of Real Estate course materials for $399 ( address required). The Practical Real Estate Lawyer s e-forms (6 hard copy issues + 6 alerts w/ online access), $75. PRELEF Special discount for two years (12 hard-copy issues alerts w/ online access), $119. PRELEF2Y 15% Discount for ALI-ABA In-House Members (For more information about ALI-ABA In-House, visit My office is a member of ALI-ABA In-House. Payment is in the amount of the stated tuition or price, minus 15%. See reverse side for more information on these great ALI-ABA products! $ Total Check enclosed (payable to ALI-ABA) Please charge to my credit card : AMEX DISCOVER MasterCard VISA PA residents only, add 7% sales tax to total amount (excluding course registrations and magazine subscriptions). Visit our website for online CLE, downloadable MP3s, searchable digital course materials, editable forms, and more! Card no.: Card expiration date: / name (please print) firm street address suite/floor number city state zip+4 phone (include area code) signature address (required for webcasts and online subscriptions) key code (from label) ADDRESS CHANGE? Go to REGISTRATION 800-CLE-NEWS Tuition entitles registrants to admission/access to all sessions, study materials, and the online archived program. Continental breakfasts, daily refreshment breaks, and a networking reception on Thursday are provided at the live presentation. Door registrations are accepted if space is available, but please call in advance to confirm availability. Recent Law School Graduates (past 2 years)/retired Senior Lawyers (65 and over) are eligible for a 50% tuition discount and should include a note explaining their eligibility with their registration. Discounts may not be combined. SATISfACTION GuARANTEEd! ALI-ABA strives to provide courses and products of the highest quality. If you are not completely satisfied with any ALI-ABA course or product, we will refund your money in full. PERSONS WITH disabilities who need special accommodations to attend should ALI-ABA at info@ali-aba.org at least two weeks in advance. TuITION ASSISTANCE is based on need. To apply, please request an application or go to org/aliaba/form_ta.asp. Applications from minority lawyers, public interest lawyers, government lawyers, recently admitted solo practitioners, and other lawyers with financial hardships are encouraged and must be received with a $25 nonrefundable processing fee (waived for full-time J.D. candidates) no later than three weeks before the course begins. MANdATORY CLE ANd CPE CREdIT Virtually all ALI-ABA Courses of Study qualify for credit in all mandatory continuing legal education (MCLE) jurisdictions (including Illinois, Minnesota, and Wisconsin) for varying numbers of credit hours. To obtain specific information on CLE, CPE, or other professional accreditation of this course, please Jan McCarver, MCLE Coordinator, at jmccarver@ali-aba.org, or go to www. ali-aba.org/aliaba/mcle_infopage.asp. discounted AIRfARES For ALI-ABA discounted airfares, please call UNITED at (800) , re: File #565oa. Restrictions may apply. If YOu REGISTER but CANNOT ATTENd in person: 1) Consider transferring to a webcast registration and/or taking the online video or audio made available to all registrants 4-6 weeks after most ALI-ABA courses. Most states allow you to earn participatory or self-study CLE credit through these Internet formats. You will also be sent the study materials upon request. 2) Or apply your tuition to one of the following: a. DVD or mp3 CD-ROM; or b. another ALI-ABA course or product. 3) Or receive a refund less a $50 cancellation fee, provided that a request is received no later than April 30. Cancellations received by noon May 2 will be honored and tuitions refunded, less a $100 cancellation fee. Please mail, fax ( ), or (registrar@ali-aba. org) your request. Registrants who do not provide notice and do not attend will receive the study materials. HOTEL ACCOMMOdATIONS A limited block of rooms has been reserved at the Crowne Plaza Chicago Metro. Room rate: $229 per night, single or double occupancy. These rooms will be held as a block, unless exhausted, until April 11, at which time they will be released to the general public. Registrants must make their own hotel reservations and indicate that they are attending the ALI-ABA Course of Study to qualify for rooms in the block. Room reservations may be made by calling or writing to the Crowne Plaza Chicago Metro, 733 West Madison, Chicago, IL 60601; phone ; FAX Confirmations will be sent by the hotel. Please read the cancellation policy carefully. for AddITIONAL INfORMATION write to Alexander Hart, Director, Courses of Study, ALI-ABA, 4025 Chestnut Street, Philadelphia, PA ; call (215) or (toll free, U.S. and Canada only) (800) CLE- NEWS ( ), extension 1630; or go to for full details and updates and/or to register online. register

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