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Fitch: Legacy U.S. CMBS Metrics Improve in 4Q, New Deals Worsen

February 6, 2014

NEW YORK --(BUSINESS WIRE)-- Link to Fitch Ratings' Report: Commercial Mortgage Market Metrics -- U.S.A. Legacy U.S. CMBS market metrics continued improving last quarter while several key indicators for new issuance trended negatively, according to Fitch Ratings in its latest quarterly index report. Metrics for legacy U.S. CMBS continued to improve in fourth quarter 2013 (4Q'13). CMBS delinquencies fell nearly 60 bps last quarter and two percentage points on the year. 'The continued steady pace of loan resolutions should position CMBS delinquencies to finish 2014 below 4%,' said Managing Director Mary MacNeill . The volume of loans in special servicing also fell, down 7% on the quarter and nearly 30% for the year. Further, 4Q'13 ratings actions were mostly unchanged from last quarter, with the majority continuing to be affirmations. Additionally, close to 92% of investment-grade Rating Outlooks as of Dec. 31, 2013 were Stable, largely unchanged from 3Q'13. Meanwhile, new issuance metrics moved in the opposite direction last quarter. Interest rates rose along with Fitch stressed loan-to-value (LTV) ratios. Additionally, the combined percentage of full and partial interest only (IO) loans increased seven percentage points (to 55%). The number of loans with subordinate debt also rose, up by over five percentage points for the second straight quarter. Credit enhancement levels finished the quarter 500 bps higher for 'AAAsf' compared with average conduit levels in 2010. This increase reflects the gradual worsening of metrics such as Fitch stressed LTV ratios, percentage of IO loans and subordinate debt, 'the result of increased competition amongst lenders and greater confidence in the economy,' said MacNeill. Fitch's U.S. Commercial Mortgage Market Metrics report is part of a series of structured finance index reports. The report, which includes the latest on upcoming maturities, delinquency statistics, and new issuance trends, is updated quarterly and available at ' ' or by clicking on the above link. Additional information is available at '' . ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS . IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE ' WWW.FITCHRATINGS.COM '. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE. Fitch Ratings Mary MacNeill Managing Director +1-212-908-0785 Fitch Ratings, Inc. , One State Street Plaza , New York, NY 10004 or Karen Trebach Senior Director +1-212-908-0215 or Scott Pritchard Director +1-212-908-9141 or Media Relations: Sandro Scenga , New York , +1 212-908-0278 Email: Source: Fitch Ratings

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