CMBS delinquencies pass 6 pct for first time

NEW YORK Tue Jan 5, 2010 4:25pm EST

NEW YORK Jan 5 (Reuters) - The delinquency rate for loans underlying commercial mortgage-backed securities (CMBS) ballooned 500 percent in 2009, surpassing 6 percent in December for the first time, underscoring the rapid collapse of the U.S. commercial property market, according to real estate data provider Trepp.

The delinquency rate -- the percentage of loans 30 or more days delinquent -- among CMBS loans rose 0.42 percentage point in December to 6.07 percent. They began 2009 at 1.21 percent and the decade, before the U.S. commercial real estate boom, at 0.50 percent.

The casualties reached all types of commercial property. The delinquency rate among hotel mortgages mushroomed over 900 percent in the past 12 months to 13.87 percent, according to Trepp.

The office delinquency rate ballooned more than 560 percent to 3.42 percent in December, up 0.49 percentage point for the month. The delinquency rate for retail real estate loans in CMBS was up nearly 475 percent to 5.50 percent, up 0.72 percentage point in December.

The industrial delinquency rate rose more than 410 percent to 3.98 percent, up 0.65 percentage point in December. Multifamily was up 325 percent to 9.27 percent, up 0.28 percentage point for the month.

Still, the price of the bonds was stronger as the credit markets strengthened and the panic immediately following the collapse of Lehman Brothers abated. Spreads on recent vintage benchmark 10-year super seniors in December tightened by 0.65 percentage point on acreage above swaps.

For the year, the benchmark bonds finished on average at 480 percentage points over swaps, down 311 percentage points from their 2009 start of 811.

Tracking them to treasuries, the benchmark CMBS bonds ended the year at 353 percentage points over treasuries, down 493 percentage points from the 846 percentage point spread at the state of the year. (Reporting by Ilaina Jonas, editing by Matthew Lewis)

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