Half of latest JPMorgan CMBS may be recycled assets
Investors looking to buy into the latest CMBS from JPMorgan may find the assets look a little familiar. According to Barclays Capital, half of the $1.1 billion JPMCC 2010-C2 is sourced from old securitizations. "Despite the common belief that the collateral for the new deals is completely new, we see that there is actually an increasingly greater concentration of old CMBS properties that find their way into the new CMBS conduit deals," said analysts Keerthi Raghavan and Julia Tcherkassova. "Not all of these loans were originated by JP Morgan and/or securitized in old JP deals: In fact, there are a variety of originators and shelf names," they said. "An overwhelming majority of these loans were originally underwritten as 5-year interest structures and securitized in 2004-05 vintages." The majority of those loans have already paid off, and this may be driven by the initiation of the new securitization platform. "The structure of JPMCC 2010-C2 also signals that the strategy of sourcing new collateral by negotiating with borrowers with loans nearing their maturity dates might continue to prove successful in the increasingly competitive lending environment," the researchers conclude. Write to Jacob Gaffney.