Tips for Negotiating Defeasance in Conduit Loans – Part 2

The “Payment Date” Definition:

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While it may seem like a minor detail, the wording of the “Payment Date” definition in a lender’s CMBS loan documents can have a big impact on the price a Borrower pays for the Defeasance Collateral when the Borrower sells or refinances. Ideally (from a defeasance standpoint), the Payment Date definition should state that a payment due on a Payment Date that is not a Business Day will be made on the immediately succeeding Business Day (not the immediately preceding Business Day).
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