Magazine article Mortgage Banking

Moody's Upgrades CMBS Deals Due to Increased Terrorism Insuance Coverage. (Commercial)

Magazine article Mortgage Banking

Moody's Upgrades CMBS Deals Due to Increased Terrorism Insuance Coverage. (Commercial)

Article excerpt

MOODY'S INVESTORS SERVICE, NEWYORK, downgraded the ratings of the Aaa classes and some of the Aa classes of 11 single-asset and large-loan commercial mortgage-backed securities (CMB 5) transactions last year due to the lack of, or inadequacy of, terrorism insurance. On Nov. 26, 2002, President George W. Bush signed the Terrorism Risk Insurance Act of 2002 (TRIA), which voided all exclusions in commercial property and casualty insurance policies for acts of terrorism as defined in TRIA.

Since the passage of TRIA, property owners have had the opportunity to purchase increased levels of terrorism insurance that were not available prior to TRIA. Boston Properties Inc. is the sponsor of two transactions in New York City--280 Park Ave. and the Citigroup Center--that are the largest asset ($336.6 million--22.3 percent) in COMM 200-J2. Boston Properties' recently renewed all-risk property insurance program includes coverage for "certified acts of terrorism" as defined by TRIA. The increased amount and improved terms for terrorism coverage of the current policy are appropriate for the highest rating levels assigned by Moody's. …

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