Founded in 2004, Waterstone has been a defeasance advocate for its clients through defeasing over $20 Billion in securitized debt including CMBS, Agency, and Corporate Bond loans. We continue to have repeat and client referrals due to our level of customer service and transaction knowledge when consulting on defeasance transactions. Waterstone’s national representation ensures someone is always available to assist and answer questions. 

Each transaction is assigned a defeasance consultant with access to their mobile number, so your calls, texts, or emails receive prompt attention. Our clients appreciate the fact that we do not have conflicting relationships with any particular servicer or trading desk, and know that when we are hired, we truly are able to represent their best interest throughout the transaction.

See what our clients are saying about us here. Send us an email or give us a call to discuss your upcoming transaction and see how we are taking Customer Service to the Highest Level.

Based on the existing loan agreement, the notice to defease typically needs to be provided to the servicer 30 days prior to closing. It is best to stick to this schedule when possible to ensure the transaction closes smoothly. In more pressing situations, we have closed transactions as quickly as one week! However, various third parties may apply expediting fees to meet timelines with less than 30 days’ notice.

Keep in mind that not all transactions are the same and based on your loan documents your transaction may require additional review from Rating Agencies. If this is the case, it could extend your closing timeline. Best practice is to get defeasance advisors like Waterstone involved early, so we can review the transaction and properly set expectations and help you avoid unnecessary expediting fees from the servicer.

Normally your loan can be defeased on the earlier of two years after the loan was securitized, or three – four years after origination.  After we review the loan agreement, we can confirm when your loan can be defeased. We have access to information from the servicers that will also provide us the securitization date so we can confirm your loan is eligible for defeasance.

There are several reasons this can happen. There is a finite number of securities available in the market that can be included in a defeasance portfolio. If you are collecting securities estimates from reliable sources at the same time, the figures should be very similar.

The defeasance securities price is market driven and the rates are constantly changing which impact your defeasance costs. As rates increase, the cost to defease will decrease and vice versa. Obtaining quotes that are days or weeks apart can show a huge variance in the cost of the securities based on market conditions when each were provided.

Defeasance online calculators are a great tool to get an estimate for your defeasance costs.  However, it is not advised that you select a provider based on these calculations. You cannot be sure if the calculator you are using may have a glitch and provide inaccurate numbers or how often the rates for the calculator are updated. The defeasance calculator on our website is constantly updating rates and will provide you a great estimate but we recommend speaking with one of our professionals before any provider decisions are made. Contact us.

Unfortunately, there may be consultants that mislead borrowers and provide a low quote on securities pricing based on no factual data to try and win their business.  We take pride in our quoting process and do our best to make sure we provide our clients, and future clients, with accurate information for them to decide. We correctly provide our initial quote and keep you updated on costs throughout the process so there are no surprises when we get to the closing table.

Waterstone has always offered to place the securities portfolio in a competitive bidding process with at least 3 trading desks when executing a trade for a defeasance transaction.  We believe this ensures we are getting the best pricing available for our clients.

There are two major benefits to using the bidding process.  The first is that we include Primary and Secondary broker dealers. Primary broker dealers can buy securities directly from the government. Secondary broker dealers must buy the securities from a Primary broker dealer (including paying a markup).

The second benefit is that it constricts the margin that the brokers make on each trade. By putting the brokers in a competitive bid, their fee collected is reduced to typically $1,000-$5,000 per trade.  This is reasonable based on the expertise and amount of time and effort involved in structuring a complex defeasance securities portfolio.

Some of our competitors have existing banking relationships and ties to only one Secondary trading desk. We believe this creates a conflict of interest between you as the borrower and the securities trader. The Secondary broker will have to acquire securities from a Primary broker dealer and the additional mark up is going to be passed through to you as the client. 

We are independent from all banks, servicers and trading desks which allow us to advocate on your behalf to ensure you get the best possible securities pricing. Depending on the type of securities allowed, secondary brokers may be able to provide a better priced portfolio. However, why settle for using just one, when you can get accurate levels from different areas of the market and ensure you are getting best pricing? We will also provide the bids after we execute your securities trade. Please feel free to contact us with any questions regarding our closing process.

At times, borrowers prefer attractive floating rate notes as opposed to fixed rate debt. However, lenders typically require the borrower to hedge the risk from rising rate exposure, in such cases the customer can hedge the risk with Interest Rate Caps and Swaps. We can facilitate CAPS and Swaps, we have multiple markets in order to get competitive executions.