The cumulative default rate for fixed-rate commercial mortgage-backed securities (CMBS) increased to 12.9% at the end of the second quarter – a 228-basis-point increase compared to year-end 2010, Fitch Ratings reports in its weekly U.S. CMBS Market Trends newsletter.
‘Limited conduit issuance so far this year has not yet helped to stabilize the cumulative CMBS default rate,’ says Managing Director Mary MacNeill.
So far, the agency has rated $9.95 billion in new fixed-rate conduit CMBS.
MacNeill says that highly leveraged loans from 2005 through 2008 continue to default at elevated rates. Each vintage during that three-year span experienced a more than 200-bp increase in defaults from year-end 2010, Fitch says. The 2007 vintage saw the biggest jump – up 549 bps.
