Delinquencies for commercial real estate loan collateralized debt obligations (CREL CDOs) continued their ascent last month, albeit slightly, according to the latest U.S. CREL CDO delinquency index results from Fitch Ratings.
Delinquencies rose in August to 12.1% from 11.9% in July, with 17 new delinquent assets reported, including two term defaults, six matured balloons, two foreclosures, and seven credit-impaired securities. The increase in delinquencies was tempered by the resolution of 12 other previously delinquent assets, including extensions of two former matured balloon loans, Fitch reports.
Realized losses of approximately $68 million were reported in August from the disposal of distressed assets.
‘There continues to be investor interest in junior mezzanine loans,’ says Director Stacey McGovern. ‘Junior mezzanine loans can provide the purchaser with an opportunity to gain control over a collateral asset.’
Thirty-four of 35 Fitch-rated CREL CDOs reported delinquencies in August, ranging from 1.2% to 39.8%.
SOURCE: Fitch Ratings