(Adds details, yield spreads)
NEW YORK Jan 7 U.S. commercial mortgage-backed
bond defaults may more than double this year as the economic
recession hurts office building, retail store and multifamily
housing assets, Fitch Ratings said on Wednesday.
Defaults could rise to about 150 basis points of rated
commercial-mortgage-backed securities (CMBS) originated in 2005
to 2007, Fitch analysts said in a statement.
CMBS defaults rose by 60 basis points in 2008, to 83 basis
points, they said.
The increase in defaults accelerated in the fourth quarter,
they said. On an annualized basis, defaults for 2005-2007 CMBS
originated at the market peak hit 110 basis points, 222 basis
points and 65 basis points, respectively.
"With a continued global recession expected to last through
much of next year, commercial loan defaults are likely to rise
at pace equal or exceeding fourth quarter levels," Susan
Merrick, a managing director at Fitch, said in the statement.
Despite the negative outlook on delinquencies, CMBS have
stabilized since mid-November after ruthless selling pushed
yield spread premiums to record levels. Spreads on the
top-rated part of the CMBX-5 derivative index are hovering
around 550 basis points over their benchmark, down from more
than 800 basis points in November.
(Reporting by Al Yoon; Editing by Leslie Adler)