Last Month Showed Spike In Loans Paying At Maturity

The percentage of commercial loans paying at maturity increased in the month of May, according to Trepp's analysis of a select host of loans – ones that have gotten all the way to their balloon date without having prepaid or defeased.

According to Trepp, the percentage of loans paying off on their balloon date jumped sharply in May to 77.1%, which is more than 13 points higher than the April reading of 63.6%. The month's increase broke a string of five straight months in which the payoff rate had fallen. From November 2013 to April 2014, the rate dropped from 81.3% to 63.6%.

The May payoff percentage was well above the 12-month moving average of 70.9%. (This number sums the averages of each month and divides by 12; there was no balance weighting across the months.)

The highest rate in the last five years was in November 2013, when payoffs totaled 81.3%. Trepp notes it began measuring this statistic in August 2008.

By loan count (as opposed to balance), 74.8% of loans paid off in May – an increase from April's level by loan count, as 67.0% paid off. The 12-month rolling average by loan count is now 70.1%, the company reports.

Trepp adds that this pool counts only fixed-rate, U.S. conduit loans (no floaters).


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