Canadian Defeasance

Commercial Defeasance closed the first Canadian commercial mortgaged backed securities (CMBS) defeasance in 2002. Since then, we have structured more Canadian defeasances than all of our competitors combined. As the unmatched leader in defeasance facilitation, our deep industry relationships, experience and knowledge of the Canadian market help us to actively manage each transaction and save our clients valuable time and money.

What you can expect from us

Commercial Defeasance has defeased loans secured by all property types in every province, closed numerous defeasances with every servicer and their counsel and closed many of the largest and most complex Canadian defeasances to date.

We handle every step of the defeasance process from start to finish. We work with the master/primary servicer, servicer's counsel, accountants, rating agencies, title company and securities intermediary to close the defeasance contemporaneously with the refinance or sale. No other company works harder throughout the defeasance process to make certain your defeasance closes on schedule.

We have dedicated deal management teams who specialize in Canadian defeasance and are always available to explain the process. Our structuring of the bond portfolio is renowned and unparalleled in the industry. Additionally, because we are not owned by a bank or broker, we are able to insist that the broker utilize cost saving measures for our clients in regards to the final purchase of the securities.

Is there a successor borrower?

A release of the borrower's payment obligations under the loan could create a novation or taxable event to the certificate holders, so a defeasance in Canada does not include a third-party successor borrower that assumes the borrower's obligations under the defeased loan. At closing, the borrower is only released from its obligations related to the real estate. The obligations of the borrower under the Commitment Letter survive (including ongoing payment obligations). However, after the defeasance, payment and performance are secured by the portfolio of government bonds.