CMBS glossary: 198 terms, defined

By Brad Beattie, Director, Capital Markets, Janover Capital LLC · Published November 1, 2026

This glossary defines 198 terms used in commercial mortgage-backed securities, from the borrower's side (defeasance, cash traps, assumptions) and the investor's (tranches, appraisal reductions, risk retention). Each definition is one or two sentences; 167 terms link to a full guide. Deal figures are from BANK5 2025-5YR14, the reference deal used across this site.

A

A-note: The senior note when one loan is split into senior and subordinate notes. It is paid first and is usually the piece held by the CMBS trust. Full guide
A/B note split: A workout that divides a troubled loan into an A-note sized to what the property can support and a subordinate B-note (the "hope note") paid only if value recovers. Full guide
ABS (asset-backed security): Under Regulation AB, a security paid primarily from the cash flows of a discrete pool of financial assets; legally that includes CMBS. In market usage, ABS usually means bonds on auto loans, cards, student loans or equipment. Full guide
Acceleration: The lender declaring the whole loan balance immediately due after an event of default under the loan documents.
Actual/360: Interest computed on the actual number of days in each month over a 360-day year, so a year of interest is slightly more than the stated rate. Every loan in BANK5 2025-5YR14 accrues this way.
Advance: Money the master servicer puts up when a borrower misses a payment (a P&I advance) or a property cost such as taxes or insurance goes unpaid (a servicing advance), repaid with interest from later collections. Full guide
Agency CMBS: Multifamily mortgage securities guaranteed by Fannie Mae, Freddie Mac or Ginnie Mae, a market separate from private-label conduit CMBS. Full guide
Amortization: Repayment of principal over time through scheduled payments. Many CMBS loans are interest-only for some or all of the term, leaving a balloon at maturity.
Anticipated repayment date (ARD): A date before final maturity after which an ARD loan's interest rate steps up and excess cash is applied to principal, giving the borrower a strong reason to refinance by then.
Appraisal reduction amount (ARA): The amount by which a troubled loan's balance (plus amounts owed) exceeds 90% of its new appraised value plus reserves, under the PSA formula. It cuts interest advances and can shift control of the trust. Full guide
Appraisal reduction event: A trigger in the PSA, such as 120 days of delinquency or a missed balloon, that requires the special servicer to order a new appraisal and compute an appraisal reduction amount. Full guide
As-is value: An appraisal of the property in its current condition and occupancy. CMBS loan-to-value ratios are generally calculated on as-is values. Full guide
ASER (appraisal subordinate entitlement reduction): The cut in interest advances that follows an appraisal reduction. The shortfall falls on the most junior classes first. Full guide
Asset representations reviewer: An independent party, required for shelf-registered deals, that reviews delinquent loans for breaches of the loan sellers' representations when investors vote for a review (17 CFR 239.45). Full guide
Asset status report: The special servicer's written plan for a specially serviced loan: the situation, the options and the recommended resolution, shared with the directing certificateholder. Full guide
Assumed final distribution date: The date a class would be paid off under the prospectus's modeling assumptions, typically no prepayments and no defaults. It is not a legal deadline. Full guide
Assumption: A buyer of the property taking over the existing CMBS loan with the servicer's consent, usually for a fee and after underwriting the buyer. It is not a significant modification under REMIC rules. Full guide

B

B-note: A subordinate note in a single loan, behind the A-note, held by a different investor or created in a workout. Not the same as a B-piece. Full guide
B-piece: The most junior, first-loss bond classes of a CMBS trust, usually unrated or below investment grade. In BANK5 2025-5YR14 it was Classes F-RR through K-RR. Full guide
B-piece buyer: The investor that buys the B-piece. It reviews every loan before the deal prices, usually appoints the special servicer, and often holds the bonds to satisfy risk retention. Full guide
Balloon payment: The large final payment of the remaining principal at maturity. On a full-term interest-only loan, the balloon is the entire original balance. Full guide
Borrower: In a CMBS loan, usually a single-purpose entity that owns only the property; the people behind it are the sponsor and the guarantor.

C

Call protection: Loan terms that discourage or bar early repayment, such as a lockout, defeasance or yield maintenance, so bondholders keep their expected cash flow. Full guide
Cap rate: Net operating income divided by property value. Appraisers and rating agencies use it to turn income into value.
Capital stack: The layers of financing in a property or a trust, ordered by who is paid first and who loses first. Full guide
Carve-out guarantor: The person or entity that guarantees the non-recourse carve-outs, becoming liable for losses or the full loan if the listed bad acts occur. Full guide
Cash management: Loan provisions that route property income through lender-controlled accounts, often starting only after a trigger, so the lender can apply cash to debt service, reserves and, in a sweep, the loan. Full guide
Cash trap (also: cash sweep): A period, triggered by a DSCR or debt yield test, a default or a tenant event, in which excess cash flow is held by the lender instead of going to the owner. Full guide
Certificate administrator: The party that calculates and pays monthly distributions, publishes reports and often acts as REMIC administrator. In BANK5 2025-5YR14, Computershare Trust Company, N.A. Full guide
Certificates: The bonds a CMBS trust issues, formally pass-through certificates representing interests in the trust. Full guide
Class R: The residual interest class of a REMIC trust. It receives no principal or interest in a typical CMBS deal; it exists to meet the REMIC rules. Full guide
Clean-up call: An option to buy the remaining loans and end the trust once the pool has paid down to a small fraction of its original size; in BANK5 2025-5YR14, below 1.0%. Full guide
CLTV (combined loan-to-value): All debt secured by the property, including junior liens, divided by its value.
CMBS (commercial mortgage-backed securities): Bonds paid from a pool of commercial real estate loans held in a trust, issued in classes from senior to first loss. Full guide
CMBS loan: A commercial mortgage originated to be sold into a CMBS trust: typically fixed-rate, non-recourse, five or ten years, and serviced by a master servicer after closing. Full guide
CMBX: A family of synthetic credit indexes, each referencing 25 CMBS bond classes of one original rating, used to hedge or trade CMBS credit risk. Full guide
Companion loan: A note of a split loan that sits outside the trust, either pari passu with the trust's note or subordinate to it.
Conduit: A multi-borrower CMBS deal pooling loans from several lenders across property types and markets; also the lending programs that originate those loans. Full guide
Consultation termination event: The point at which no class eligible for control keeps at least 25% of its original balance, ending the directing certificateholder's consultation rights (BANK5 2025-5YR14). Full guide
Control termination event: The point at which the controlling class group is worn down below a threshold (in BANK5 2025-5YR14, Class F-RR below 25% of its original balance after appraisal reductions) and the directing certificateholder loses its consent rights. Full guide
Controlling class: The most junior class still holding at least a set share of its original balance, whose majority holder appoints the directing certificateholder. At BANK5 2025-5YR14's closing it was Class K-RR. Full guide
Corrected loan: A specially serviced loan that has made three consecutive full and timely monthly payments (in the reference PSA) and returns to the master servicer, with the special servicer earning a workout fee afterward. Full guide
CRE CLO: A collateralized loan obligation backed by commercial real estate loans, usually floating-rate loans on transitional properties, often with a manager and a reinvestment period. Full guide
Credit risk retention: The federal rule (17 CFR part 246) requiring the sponsor, or in CMBS a qualified B-piece buyer, to keep at least 5% of a securitization's credit risk. Full guide
Credit support: The share of the pool subordinate to a class: how much the pool can lose before that class loses principal. BANK5 2025-5YR14's senior classes had 30%. Full guide
CREFC: The CRE Finance Council, the industry association whose Investor Reporting Package standardizes the monthly loan and property reports CMBS servicers produce.
CREFC Investor Reporting Package (IRP): The standard set of servicer reports (loan periodic updates, operating statements, watchlists and more) that CMBS pooling and servicing agreements require.
Cross-collateralization: Securing several loans, or one loan, by several properties so that each property backs the whole debt.
Cross-over date: The distribution date on which every subordinate class has been written to zero by losses, after which the senior classes share principal pro rata instead of in sequence. Full guide
Cut-off date: The date as of which loan balances are fixed for the pool; in BANK5 2025-5YR14, each loan's April 2025 payment due date. Full guide

D

Debt service: The scheduled principal and interest payments on a loan over a period, usually a year.
Debt service coverage ratio (DSCR): Net cash flow divided by annual debt service. CMBS prospectuses report it on underwritten net cash flow. Full guide
Debt yield: Net operating income divided by the loan amount, a sizing test that ignores the interest rate and amortization. Full guide
Deed in lieu of foreclosure: The borrower handing the property to the lender in exchange for ending the foreclosure, usually with a negotiated release. Full guide
Default interest: A higher interest rate the loan documents impose while the loan is in default.
Defeasance: Replacing the mortgage collateral with government securities whose payments match the remaining loan payments, so the lien is released while the trust keeps its cash flow. REMIC rules bar it within two years of the startup day. Full guide
Defeasance lockout: The period after closing, typically at least two years after the trust's startup day, during which the loan cannot be defeased or prepaid. Full guide
Delinquency: A payment past due. Schedule AL reports each loan's payment status monthly, from current through 30, 60 and 90-plus days late and matured. Full guide
Depositor: The entity that buys the loans from the sellers and deposits them into the trust, and registers the offering with the SEC. In BANK5 2025-5YR14, Wells Fargo Commercial Mortgage Securities, Inc. Full guide
Determination date: The monthly date on which servicers fix the amounts to be distributed; in BANK5 2025-5YR14, the 11th, with distributions four business days later. Full guide
Directing certificateholder (also: controlling class representative): The representative of the controlling class, with consent or consultation rights over major decisions and, while it has control, the right to replace the special servicer. Full guide
Discounted payoff (DPO): A special servicer accepting less than the full balance to retire a defaulted loan. Full guide
Distribution date: The monthly date bondholders are paid. In BANK5 2025-5YR14, the fourth business day after the determination date.
Due-on-encumbrance clause: A loan provision that makes added debt secured by the property (or interests in the borrower) a default unless the lender consents. Full guide
Due-on-sale clause: A loan provision that makes a sale or transfer of the property a default unless the lender consents, which is why buyers assume CMBS loans through the servicer. Full guide

E

Effective gross income: Potential rental income less vacancy, concessions and credit loss, plus other property income, before operating expenses.
Eligible horizontal residual interest: In risk retention, the first-loss position: classes that absorb any shortfall before every other class, worth at least 5% of the deal's fair value if held alone (17 CFR 246.2 and 246.4). Full guide
Eligible vertical interest: In risk retention, the same share of every class (at least 5% if held alone), or a single vertical security (17 CFR 246.4). Full guide
Event of default: A breach defined in the loan documents, such as non-payment or an unpermitted transfer, that lets the lender accelerate and enforce. Full guide
Excluded loan: A loan whose borrower is affiliated with the directing certificateholder or controlling class holder; that party gets no consent or consultation rights over it.
Extension: Moving a loan's maturity date out, usually in exchange for conditions such as a paydown, reserves or cash management. In a REMIC it generally needs a default or reasonably foreseeable default. Full guide

F

Fair value: The GAAP measure of what an interest would sell for. Horizontal risk retention is measured at fair value, which is why a B-piece can be 8.6% of face amount and about 5% of fair value. Full guide
Forbearance: An agreement by the servicer to hold off on remedies for a period while the borrower cures or the parties negotiate. Full guide
Foreclosure: The legal process by which the lender takes or sells the property after default. Property taken by the trust becomes REO. Full guide
Form 10-D: The monthly SEC distribution report a public CMBS trust files, alongside updated loan-level data on Form ABS-EE.
Form 8-K: An SEC current report. CMBS trusts file their pooling and servicing agreements as 8-K exhibits around closing. Full guide
Form ABS-EE: The SEC form that carries a trust's Schedule AL asset-level data: one record per loan, filed at issuance and with each monthly report. Full guide
Form SF-3: The SEC shelf registration form for asset-backed securities, with conditions including a CEO certification and an asset representations reviewer (17 CFR 239.45). Full guide
Full-term interest-only: A loan that pays only interest for its entire term, with the full balance due at maturity. Most recent conduit loans are structured this way. Full guide
Fusion deal: A conduit pool that also includes a few large loans with low leverage, which rating agencies may treat separately.

G

Grace period: Days after a due date before a missed payment becomes a default or incurs a late charge, as set in the loan documents.
Ground lease: A long-term lease of the land under a building. A CMBS loan on a leasehold is secured by the borrower's leasehold interest, and lenders review the ground lease terms closely.
Guarantor: The person or entity guaranteeing the loan's non-recourse carve-outs and, often, environmental indemnities and completion of required work. Full guide

H

Hard lockbox: An account into which tenants pay rent directly, controlled by the lender from closing. Full guide
Hope note: The subordinate B-note created when a special servicer splits a troubled loan, repaid only if the property's value recovers. Full guide
Horizontal risk retention: Meeting the 5% risk retention requirement by holding the first-loss classes. See eligible horizontal residual interest. Full guide
Hyper-amortization: The period after an anticipated repayment date when excess cash flow pays down principal on an ARD loan.

I

Imminent default: A servicer's determination that a payment or balloon default is likely in the foreseeable future and would last at least 60 days, which can transfer a loan to special servicing before any payment is missed. Full guide
Insurance requirements: The coverage a CMBS loan agreement requires, typically property, liability, business interruption and, where relevant, flood, wind and terrorism, with lender approval of carriers. Full guide
Intercreditor agreement: The contract among holders of a split loan's notes, or between a mortgage lender and a mezzanine lender, setting payment priority, control and cure rights. Full guide
Interest shortfall: A month in which a class receives less interest than it is owed, from causes such as appraisal reductions, nonrecoverable advances or special servicing fees.
Interest-only (IO) loan: A loan that pays only interest for some or all of its term, with no scheduled principal. Full guide
Investment grade: Ratings of BBB- (or Baa3) and above. In BANK5 2025-5YR14, the offered classes other than X-B, B and C had to be rated investment grade by all three hired agencies. Full guide

K

Kick-out: A loan removed from a proposed pool before pricing, often at the B-piece buyer's request after its due diligence. Full guide

L

Liquidation fee: The special servicer's fee on proceeds from a payoff at a discount, note sale, foreclosure or REO sale; in the reference PSA, 1% (more on small recoveries to reach $25,000, up to 3%). Full guide
Loan seller (also: mortgage loan seller): An originator or aggregator that sells loans into the deal and gives representations and warranties on them. Full guide
Loan-to-value (LTV): Loan balance divided by appraised value; CMBS reports it at the cut-off date and at maturity. Full guide
Lockbox: A lender-controlled account receiving property income, either from closing (hard) or after a trigger (springing). Full guide
Lockout period: The stretch after origination when a loan cannot be prepaid or defeased at all. A schedule written L(27) means 27 payments of lockout. Full guide
Loss severity: The loss on a liquidated loan as a share of its balance, after recoveries and expenses.
Lower-tier REMIC: The REMIC that holds the mortgage loans in a two-tier CMBS trust and issues regular interests to the upper-tier REMIC. Full guide

M

Major decision: A servicing action defined in the PSA, such as a monetary modification, extension, discounted payoff, assumption that releases a party, collateral release or foreclosure, that needs the directing certificateholder's consent while it has control. Full guide
Master servicer: The servicer for performing loans: it collects payments and escrows, handles routine requests, and makes advances. In BANK5 2025-5YR14, Trimont LLC. Full guide
Maturity date: The date the remaining balance (the balloon) is due. Full guide
Maturity default: Failing to repay the balloon at maturity, which in the reference PSA transfers the loan to special servicing unless a signed refinancing or sale that closes within 120 days is in hand. Full guide
Maturity wall: A concentration of loans coming due in a short period, which raises refinancing risk across the market. Full guide
Mezzanine loan: A loan secured by a pledge of the ownership interests in the borrower rather than by the property, subordinate to the mortgage and governed by an intercreditor agreement. Full guide
Modification: A change to a loan's terms. REMIC rules generally allow significant modifications only when a default exists or is reasonably foreseeable. Full guide
Mortgage loan purchase agreement: The contract under which each loan seller sells its loans to the depositor, with representations and warranties and a duty to repurchase, substitute or compensate for breaching loans. Full guide

N

Net cash flow (NCF): Net operating income less reserves for capital expenditures, tenant improvements and leasing commissions; the income CMBS DSCR is measured on. Full guide
Net operating income (NOI): Property revenue less operating expenses, insurance, real estate taxes and ground rent, before reserves and debt service. Full guide
Non-consolidation opinion: A legal opinion that the borrower would not be merged into its parent's estate in the parent's bankruptcy, part of the single-purpose entity structure.
Non-recourse: A loan repaid only from the property, with no personal liability except under the carve-outs for listed bad acts. Full guide
Non-recourse carve-outs (also: bad-boy carve-outs): The listed acts, such as fraud, misapplied funds, voluntary bankruptcy or unpermitted transfers, that make the guarantor liable for losses or the full debt. Full guide
Non-serviced mortgage loan: A loan in the trust that is one note of a split loan serviced under another trust's pooling and servicing agreement. Full guide
Nonrecoverable advance: An advance the servicer judges will not be repaid from the loan or property. Servicers stop advancing once they make that determination. Full guide
Note sale: The special servicer selling a defaulted loan to a third party instead of working it out or foreclosing. Full guide
Notional amount: A reference balance used to compute interest on an interest-only class; no principal is paid on it. Class X-A's notional amount equals the balance of the senior A classes. Full guide
NRSRO: Nationally recognized statistical rating organization: a credit rating agency registered with the SEC, such as Fitch, KBRA, Moody's, S&P or Morningstar DBRS. Full guide

O

Occupancy: The share of a property's space or units leased (economic) or physically occupied (physical). Schedule AL reports physical occupancy at securitization and the most recent figure.
Open period: The final payments before maturity when a loan can be prepaid without penalty. A schedule ending O(7) has a seven-payment open period. Full guide
Operating advisor: An independent party that reviews the special servicer's conduct, reports to investors and can recommend its replacement; required when a B-piece buyer holds the retained risk (17 CFR 246.7(b)(6)). Full guide
Operating advisor consultation event: The point at which the risk retention classes fall to 25% or less of their original balance (after appraisal reductions), after which the special servicer must consult the operating advisor on major decisions. Full guide
Operating statement: The property's income and expense report, which CMBS borrowers deliver to the servicer, usually quarterly and annually, and which servicers summarize for investors.
Originator: The lender that makes the loan. It may sell the loan into a deal directly or through an affiliated loan seller. Full guide

P

P&I advance: The master servicer's payment to bondholders of a borrower's missed scheduled principal and interest, if recoverable. It is not made for a missed balloon and is cut by appraisal reductions. Full guide
Pari passu: Equal in right of payment. A large loan is often split into pari passu senior notes placed in different trusts that share payments pro rata.
Partial release: Releasing one property or parcel from the lien, usually on a paydown and LTV, DSCR or debt yield tests set in the loan documents. Full guide
Pass-through rate: The interest rate a certificate class pays: fixed, a WAC, a WAC cap, or for interest-only classes a strip of the pool's interest. Full guide
Payment status code: The Schedule AL field reporting whether a loan is current, 30, 60 or 90-plus days delinquent, or past maturity. Full guide
Permitted investments: In REMIC rules, the assets a REMIC may hold besides qualified mortgages: cash flow investments, qualified reserve assets and foreclosure property (26 U.S.C. 860G(a)(5)). Full guide
Pooling and servicing agreement (PSA): The contract that creates a CMBS trust and governs its loans, servicers, fees, payment order and control rights. Full guide
Prepayment premium: A fee for paying a loan off early, either a fixed percentage schedule or a yield maintenance formula. Full guide
Primary servicer (also: sub-servicer): A servicer to which the master servicer delegates some loans, often the originator's servicing arm. Full guide
Principal window: The months over which a class is expected to receive its principal under the prospectus's modeling assumptions. Full guide
Prohibited transaction: A REMIC activity taxed at 100% of the net income from it, such as disposing of a qualified mortgage other than through foreclosure, default or imminent default (26 U.S.C. 860F). Full guide
Property condition report: A third-party engineer's report on a property's physical condition and expected capital needs, used to size replacement reserves. Full guide
Prospectus: The offering document for public CMBS, filed with the SEC under Rule 424(b), describing every loan, the classes, the parties and the risks. Full guide

Q

Qualified mortgage (REMIC): An obligation principally secured by real property that a REMIC acquires on its startup day or within three months under a fixed-price contract (26 U.S.C. 860G(a)(3)). Full guide
Qualified replacement mortgage: A loan substituted into a REMIC for another within three months of the startup day, or for a defective loan within two years (26 U.S.C. 860G(a)(4)). Full guide
Qualifying CRE loan: A commercial real estate loan meeting the strict standards of 17 CFR 246.17 (ten-year minimum term, full amortization, LTV and DSCR limits), which reduces required risk retention. Few conduit loans qualify. Full guide

R

Rated final distribution date: The legal final date by which a class must be paid for its rating, set well after the loans mature; April 2058 for BANK5 2025-5YR14. Full guide
Rating agency confirmation (RAC): Written confirmation from each rating agency that an action, such as an assumption or a servicer replacement, will not cause a downgrade, withdrawal or qualification of its ratings. Full guide
Realized loss: The loss on a loan once it is liquidated or written down, allocated to the most junior class outstanding first. Full guide
Receivership: A court-appointed receiver taking control of the property's operations and income, often during foreclosure. Full guide
Recourse: Personal liability of the borrower or a guarantor for the debt beyond the property.
Refinance: Repaying the existing loan with a new one, at maturity or, subject to prepayment terms, before it. Full guide
Regular interest: A REMIC interest entitling the holder to a specified principal amount and fixed or qualifying variable interest, taxed as debt. CMBS bond classes are regular interests. Full guide
Regulation AB: The SEC's disclosure rules for asset-backed securities (17 CFR 229.1100-1125), substantially revised in 2014 as Regulation AB II to add loan-level data and new shelf conditions. Full guide
REMIC: Real estate mortgage investment conduit: the tax election (26 U.S.C. 860A-860G) that lets a fixed pool of mortgages pass income to holders untaxed at the entity level. Full guide
REO (real estate owned): Property the trust has taken through foreclosure or deed in lieu, managed and eventually sold by the special servicer. Full guide
Replacement reserve: An escrow funded monthly for capital repairs and replacements. Full guide
Representations and warranties: Statements each loan seller makes about each loan (title, liens, compliance, documents). A material breach can require the seller to repurchase or compensate the trust. Full guide
Reserves (also: escrows, impounds): Lender-held escrows for taxes, insurance, replacements, tenant improvements and leasing commissions, and other items set in the loan agreement. Full guide
Residual interest: The single class of REMIC interest that is not a regular interest; in CMBS, Class R. Full guide
Retaining sponsor: The sponsor responsible for complying with risk retention, whether it holds the interest or a third-party purchaser holds it. In BANK5 2025-5YR14, Wells Fargo Bank. Full guide
Rev. Proc. 2009-45: IRS guidance that lets REMIC servicers modify performing commercial loans when there is a significant risk of default, and allows discussions at any time. Full guide
Rule 17g-5: The SEC rule under which information given to hired rating agencies is posted for other NRSROs, so they can issue unsolicited ratings. Full guide

S

SASB (single asset, single borrower): A CMBS deal backed by one large loan or one sponsor's portfolio, so the bonds depend on that collateral alone. Full guide
Schedule AL: The SEC's asset-level data schedule (17 CFR 229.1125). Item 2 covers commercial mortgages: loan terms, property data, financials, payment status, servicer actions and modifications. Full guide
Securitization: Pooling loans, selling them to a trust and issuing securities backed by their payments. Full guide
Senior classes: The top classes of the stack, paid interest and principal first and allocated losses last. Full guide
Sequential pay: Paying principal to one class at a time, top down, until each is retired. Full guide
Servicing advance: Money the master servicer spends to protect the collateral, such as unpaid taxes, insurance or property preservation, reimbursed with interest. Full guide
Servicing standard: The PSA duty to service the loans for all certificateholders as a collective whole, maximizing recovery on a net present value basis without regard to the servicer's own fees. Full guide
Servicing transfer event: A PSA trigger that moves a loan to the special servicer: in the reference deal, a payment 60 days late, a missed balloon, imminent default, insolvency events and certain other defaults. Full guide
Significant modification: Under 26 CFR 1.860G-2(b), a change to a REMIC-held loan treated as an exchange for a new loan, which the REMIC cannot hold; defaults, assumptions and certain collateral changes are excepted. Full guide
Single-purpose entity (SPE): A borrower whose organizational documents limit it to owning and operating the property, with covenants that keep it separate from affiliates.
Special servicer: The servicer that takes over loans after a servicing transfer event and decides on workouts, sales and foreclosure. In BANK5 2025-5YR14, Torchlight Loan Services, LLC. Full guide
Special servicing fee: The special servicer's monthly fee on a specially serviced loan; in the reference PSA, 0.25% a year of the balance with a $3,500 monthly minimum. Full guide
Specially serviced loan: A loan currently with the special servicer because of a servicing transfer event. Full guide
Sponsor: Two meanings: in a securitization, the bank or lender that organizes the deal and sells loans into it; in a loan, the real estate investor behind the borrower.
Springing cash management: Cash management that starts only after a trigger, such as a DSCR or debt yield test failing. Full guide
Startup day: The day a REMIC issues all its regular and residual interests, which starts the clocks for qualified mortgages and defeasance (26 U.S.C. 860G(a)(9)). Full guide
Subordination: Ranking some classes behind others in payment and loss, the only credit enhancement in a conduit CMBS deal. Full guide
Successor borrower: In a defeasance, a new entity that assumes the defeased loan and holds the substitute securities, so the original borrower is released. Full guide
Supplemental financing: Additional debt on a property with a CMBS loan, usually mezzanine debt or preferred equity, allowed only if the loan documents permit it. Full guide
Swap spread and loan spread: Conduit loan rates are usually quoted as a spread over a Treasury or swap rate of matching term; the spread follows where new CMBS bonds sell. Full guide

T

Third-party purchaser: A B-piece buyer holding the eligible horizontal residual interest for the sponsor under 17 CFR 246.7, subject to cash payment, loan review, independence and hold conditions. Full guide
TI/LC reserve: An escrow for tenant improvements and leasing commissions on office, retail and industrial properties. Full guide
Tranche: One class of a CMBS trust's bonds, with its own balance, rate and payment priority. Full guide
Trust: The issuing entity that holds the loans for bondholders, often a New York common law trust that elects REMIC status. Full guide
Trustee: The party that holds the mortgages of record for the trust and backs up the master servicer's advancing. In BANK5 2025-5YR14, Computershare Trust Company, N.A. Full guide

U

Underwritten net cash flow: The lender's adjusted estimate of the property's cash flow available for debt service after reserves, the basis for CMBS DSCR. Full guide
Unsolicited rating: A rating issued by an agency the issuer did not hire, using information posted under Rule 17g-5. Full guide
Upper-tier REMIC: The REMIC in a two-tier trust that holds the lower-tier REMIC's regular interests and issues the certificates. Full guide

V

Vertical risk retention: Meeting the 5% requirement by holding the same share of every class. See eligible vertical interest. Full guide
Vintage: The year or period in which loans were originated or a deal was issued. Loans of the same vintage share the market conditions they were underwritten in. Full guide

W

WAC (weighted average coupon): The pool's average loan interest rate weighted by balance, net of servicing and trust fees when used to set certificate rates. Full guide
WAC cap: A class rate equal to the lesser of a fixed rate and the pool's weighted average net mortgage rate. Full guide
Watchlist: A servicer's list of performing loans showing warning signs, such as falling DSCR, major tenant departures or deferred maintenance, reported to investors. Full guide
Weighted average life: The average time until a class's principal is repaid, weighted by amount. In BANK5 2025-5YR14, 2.43 years for Class A-1 and about 4.98 years for Classes A-S through K-RR. Full guide
Whole loan: A loan counted as a whole, including all its notes. When a loan is split, each trust holds only a note of the whole loan.
Workout: A negotiated resolution of a troubled loan, such as a modification, extension, forbearance or discounted payoff. Full guide
Workout fee: The special servicer's fee on a corrected loan; in the reference PSA, 1% of each later principal and interest collection, with a $25,000 minimum. Full guide

X

X class (also: IO strip): An interest-only certificate class with a notional amount and no principal, paid the excess of the pool's interest over the rates on the classes it references. Full guide

Y

Yield maintenance: A prepayment premium that compensates the lender for lost interest, typically computed from the gap between the loan rate and a Treasury yield over the remaining term, as the loan documents define it. Full guide
Yield maintenance charge: The amount paid under a yield maintenance formula. In CMBS trusts, these charges are distributed to bondholders under a separate formula, outside the main waterfall. Full guide

Sources for deal-specific figures: BANK5 2025-5YR14 prospectus and pooling and servicing agreement, filed April 2, 2025. Rules: 17 CFR parts 229 and 246, 26 U.S.C. 860A-860G and 26 CFR 1.860G-2 (eCFR and U.S. Code, current text). Other deals' terms differ; your loan documents and your trust's agreement govern.

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