It is 2017, and you work in finance for a large international media company. Your firm took out a $400m amortizing fixed-rate commercial mortgage on your U.S. corporate headquarters three years ago. The coupon rate on the mortgage is 5.25%, and the loan initially had a 25 year amortization period, and a 10 year balloon payment. (Note: Since three years have passed, this balloon payment will now occur in seven years time). Mortgage payments are monthly.

a. How possible and/or likely is it that this loan was financed through the CMBS market? Explain your logic. How would this loan be financed otherwise?

b. What if this mortgage had been originated eight years ago instead - would your answer to part (a) be at all different?

c. Calculate the monthly payment on this mortgage. Also calculate the current face value on this mortgage. (Remember, the mortgage was originated three years ago).