Fitch: Broader Market Stress to Penetrate Older Vintage U.S. CMBS

NEW YORK--(Business Wire)--
Further deterioration in real estate fundamentals expected over the next 18 to
24 months are likely to cause rating downgrades for seasoned U.S. CMBS deals,
according to Fitch Ratings in a new report.

Fitch plans to close out 2009 with a thorough review of its rated portfolio of
older U.S. CMBS deals (originated in and before 2006). Fitch's analysis will
incorporate prospective stresses to the loan's cash flow similarly to the
stresses applied when reviewing the more recent vintage CMBS transactions.

'Large loan floaters, pre-2000 vintage CMBS, and deals originated in the latter
half of 2005 will be most susceptible to downgrades,' said Managing Director
Mary MacNeill. 'It should be noted that the magnitude of these expected negative
rating actions will not be as significant as that of recent actions already
taken on later vintages.'

With recent vintage CMBS encompassing nearly half of the Fitch-rated universe
and among the weaker performing deals, Fitch expects approximately 90% of its
entire rated CMBS portfolio to retain investment grade ratings once all reviews
are complete. While Fitch expects these older vintage transactions to perform
better from a ratings standpoint, 'it is now evident that all CMBS vintages are
susceptible to the severe economic conditions of the past two years,' said
MacNeill.

Fitch's third-quarter review of 2006-2008 CMBS deals, which concluded earlier
this month, resulted in rating affirmations on 80% of the tranches by
balance(totaling $186.1 billion), and downgrades for the remaining 20% ($44.3
billion). Fitch expects few additional near-term negative rating actions among
these 78 deals.

The sector is facing a steady increase in CMBS delinquencies, which Fitch
anticipates will hit 6% by first-quarter of next year and double digits by 2012.
Fitch has already accounted for this scenario in its CMBS rating criteria, which
should result in limited rating changes until the loans approach maturity and
refinance risk becomes more identifiable.

'State of U.S CMBS Ratings: Moving Toward Stability' is available at
'www.fitchratings.com' under the following headers:

Sectors >> Structured Finance >> CMBS >> Research

Additional information is available at 'www.fitchratings.com'

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Fitch Ratings
Mary MacNeill, +1-212 908-0785
Susan Merrick, +1-212-908-0725 (New York)
Media Relations:
Sandro Scenga, +1-212-908-0278 (New York)
sandro.scenga@fitchratings.com

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