U.S. commercial real estate loan collateralized debt obligations (CREL CDOs) finished 2012 higher than at year-end 2011, according to the latest index results from Fitch Ratings.
CREL CDO delinquencies for December came in at 13.4%, down from 13.7% in November. However, they are higher than the 12.5% observed in December 2011. The historical high-water mark for CREL CDO delinquencies remains 14.8%, which was observed in April 2011.
As of year-end 2012, only two Fitch-rated CREL CDOs were still in their reinvestment periods, both of which are currently failing overcollateralization tests. Total CREL CDO collateral is down by $2.9 billion since 2011, including cumulative reported realized losses over the period of over $660 million (or 4% of the total current collateral). The remaining $2.2 billion reduction was primarily the result of full asset repayments (approximately 80%) and recoveries on credit risk assets (20%).
Loans secured by land remained the property type with the highest delinquency rate, at 43% to close out 2012. However, hotel loans now have the second highest delinquency rate, at 20%. The most significant decline is attributable to multifamily properties, which have dropped to a 7% delinquency rate from 14% in 2011.