As malls collapse, the cracks are growing. Starwood Retail Property Trust 2014-STAR is backed by a defaulted loan that the borrower was unable to refinance. While the servicer paid investors out of a dwindling reserve account until June, the lender is now issuing stopgap payments out of its own pocket. In a sector already being crushed by online shopping, many bonds have now been cut deep into junk territory.

Is this kind of catastrophic default indicative of the larger narrative at play for retail? Is this the end of significant financing problems, or just the beginning? And with valuations plummeting, what will safeguard senior bondholders?