Canadian Mortgage Backed Securites: The next big thing?

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An increasingly important lender in the broker channel has successfully arranged a Canadian Mortgage Backed Securities (CMBS) transaction involving $400 million in commercial financing – marking the largest deal under the program since 2007. But is it also a sign of more and bigger things to come?

"The financing is testament to the re-emergence of the CMBS market in Canada and we see this as another key milestone," Glen Malcolm, senior vice-president at CMLS Financial said in a release this week. "CMLS Financial is a leader in the Canadian CMBS market and we will continue to show leadership through 2014 as the CMBS market further develops." 

This was the first time the CMBS was used to finance a series of hotels, which includes five Westin properties in Vancouver, Edmonton, Calgary, Toronto and Ottawa. It was financed by a solitary loan on a five-year term with a 30-year amortization.

“We are very pleased with the transaction,” CMLS CEO Chris Brossard told MortgageBrokerNews.ca.

It is unclear whether brokers were involved in the transaction.

CMLS Financial, which refers to itself as “Canada’s Mortgage Company,” specializes in commercial and residential mortgages as well as institutional products.

Brokers have generally been more focused on that residential arm, with CMLS securing three medals in the 2013 Brokers on Lenders survey.

The lender was approved to issue CMHC-backed mortgages in September.

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