173. When interest-only loans are advanced for CRE, institutions should assess property cash flow …

When interest-only loans are advanced for CRE, institutions should assess property cash flow to support a level of amortisation equivalent to the projected economic life cycle of the property, to clear the principal amount and interest of the loan in the event of an increase in the loan to value (LTV) for the property, or to a regular LTV level in the relevant market. Institutions should also consider such analysis when borrowers have additional credit enhancements, e.g. disposal assets that are legally enforceable in a reasonable time period.

1. Overview

1.1 References

1.2 Identified Requirements

1.3 Related Standards

2. Identified Requirements

3. Related Standards

• EBA -

  EN: Guidelines and other publications of the European Banking Authority (EBA), https://www.eba.europa.eu/. © European Banking Authority. Reproduction is authorised provided the source is acknowledged (EBA legal notice). Divided into sections and converted into the GRCA format, the wording unchanged. Only the versions published by the EBA are authoritative.

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