Upgrade Planned For Japanese CMBS Standards

Upgrade Planned For Japanese CMBS Standards In an attempt to revitalize its national commercial property market, the Commercial Real Estate Finance Council in Japan has announced plans to create a new standard for commercial mortgage-backed securities (CMBS).

According to a Bloomberg report, the council will concentrate on upgrading the quality of Japanese CMBS by strengthening the transparency and structure of these securities. The new standard will also provide a clear definition on the process for recovering loan principal and interest in the event of a CMBS default.

‘In the past, there was no fixed standard for structuring CMBS – practice has differed from player to player,’ says Tokio Ueyama, head of commercial real estate at Deutsche Bank in Japan and co-chairman of the council. ‘For those investors who are not familiar with CMBS, a standard would be helpful for them to consider such an investment.’

The new standard is scheduled for release in late 2012.

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