Peoples Group's, parent company of Peoples Trust and Peoples Bank, parent Triple Five two months in arrears on $1.4 billion Mall of America mortgage | Peoples Trust | Discussion forum

Sources: CNBC and Financial Times

As is no surprise, with between 60-80% of shopping mall retailers opting not to pay their monthly rent owed, indoor shopping malls and outdoor strip malls have been particularly hard hit in terms of their cash flows, with the former only able to collect, on average, about 20% of April 2020 rents owed, according to day compiled by Bloomberg, and the latter only able to collect about 40% of April 2020 rents owed, also on average. So, according to the above articles, and first reported in UK's Financial Times, privately owned Triple Five Group of Companies', which also wholly owns the Canadian-based Peoples Group of financial services companies that includes Peoples Trust Company and Peoples Bank of Canada, Mall of America (it also wholly owns American Dream and West Edmonton Mall) is now two months in arrears on its $1.4 billion mortgage.

Edit: It does appear that Mall of America does have options, as it can opt to seek so-called "forbearance" on its mortgage, which is essentially a deferral of its payments owed by tacking them on to the end of the mortgage.

This should not effect Peoples Group in any way, but it is nonetheless interesting, and, I thought, fodder for conversation.

Wells Fargo is servicing the mortgage, which is securitized in the commercial mortgage backed securities market. By this time next month, if forbearance has not been sought and approved, then Wells Fargo will report the mortgage as being in "default" to the holders of the commercial mortgage backed securities, which primarily include governments, pension funds, private equity funds, hedge funds, and other institutional class investors. I found it interesting that the U.S. commercial mortgage backed security market was approximately $500 billion, so basically, the Mall of America mortgage represents 0.2% of all securitized U.S. commercial mortgages. That's pretty substantial and incredible.

Cheers,
Doug