Trepp Announces RMS Integration to Give CMBS Investors Access to Environmental Risk Measures

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Trepp announced today that it has implemented a new data integration with Risk Management Solutions, Inc. (RMS) to provide an environmental risk score for properties backing commercial mortgage-backed securities (CMBS) loans.

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The Trepp implementation of RMS will be an important tool for investors tasked with measuring, improving, or ranking the climate change-related portion of a firm’s environmental risk as part of their ESG strategy.

Trepp, a leading provider of information, analytics, and technology to the structured finance, commercial real estate, and banking markets announced today that it has implemented a new data integration with Risk Management Solutions, Inc. (RMS), a leading global catastrophe risk company that helps evaluate and manage global risk from natural and man-made catastrophes.

The Trepp integration of RMS solutions provides an environmental risk score for properties backing commercial mortgage-backed securities (CMBS) loans.

For years, RMS has provided accurate, holistic risk scoring to the insurance markets to support quantifying the potential cost of disasters like Category 5 hurricanes and similar environmental catastrophes. The risk scores range from one-to-five and measure the likelihood of property damage and business interruption from earthquakes, flooding, wildfires, hurricanes, tornadoes, hail, winter storms, and thunderstorms.

“The Trepp implementation of RMS will be an important tool for investors tasked with measuring, improving, or ranking the climate change-related portion of a firm’s environmental risk as part of their environmental, social, and governance (ESG) strategy,” said Steve Baumgartner, Trepp’s Chief Innovation Officer.

Using RMS property loss and business interruption data, Trepp has identified the geographic distribution of risks across properties backing CMBS loans. California tops the list in terms of the number of high-risk properties. Other major states with large counts are those near low-lying or coastal areas with histories of large hurricanes or environmental events. Accordingly, Florida, Texas, and Louisiana round out the top four.

Thus far, CMBS has been resistant to environmental losses as a result of earthquakes, hurricanes, tornadoes, and the like. For the most part, insurance proceeds have covered the repayment of the loan or the replacement of the property with CMBS losses being negligible as a result. Despite this, the early return of principal from a widespread environmental event could be meaningful in some cases and as a result, using this measure on a deal-by-deal basis is a useful metric for risk managers.

To see the chart identifying the geographic distribution of risks or to learn more about the Trepp and RMS integration, contact Trepp at info@trepp.com

About Trepp
Trepp, founded in 1979, is the leading provider of information, analytics, and technology to the CMBS, commercial real estate, and banking markets. Trepp provides primary and secondary market participants with the web-based tools and insight they need to increase their operational efficiencies, information transparency, and investment performance. From its offices in New York, San Francisco, and London, Trepp serves its clients with products and services to support trading, research, risk management, surveillance, and portfolio management. Trepp is wholly owned by Daily Mail and General Trust (DMGT). For more information, visit http://www.Trepp.com.

About RMS
Risk Management Solutions™, Inc. (RMS) helps insurers, financial markets, corporations, and public agencies evaluate and manage global risk from natural and man-made catastrophes, including hurricanes, earthquakes, floods, climate change, cyber, and pandemics. RMS helped pioneer the catastrophe risk industry, and continues to lead in innovation by marrying data and advanced model science with leading-edge SaaS technology. Visit http://www.rms.com to learn more.

Trepp Media Contact
Hayley Keen
Marketing Communications Specialist
press@trepp.com

RMS Media Contact
Devonne Cusi
PR Lead, Americas
prteam@rms.com

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