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WHAT IS DEFEASANCE?


Defeasance is a process by which a borrower who had previously entered into a CMBS loan can unencumber themselves prior to the maturity of the loan. Defeasance is most commonly seen on prepayments of securitized CMBS loans. Rather than a simple prepayment calculation, the defeasance is really a substitution of collateral. A portfolio of securities, usually Treasurys, replaces the underlying real estate as the collateral and provides the payments to cover the debt service.

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PENSFORD CALCULATORS

Defeasance Calculator

Input simple terms including amount, interest rate and amortization to calculate your defeasance penalty. You can even shock the curve!

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Yield Maintenance Calculator

Pensford's yield maintenance calculator is optimized for loans with monthly payments with analysis by amortization type and shock scenarios.

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