March 10 (The following statement was released by the rating agency)
U.S. CMBS is on track for more upgrades in 2014, according to Fitch Ratings.
Through February 2014, Fitch has upgraded 44 classes, downgraded 43 and affirmed
964. At this rate upgrades will far exceed the 58 seen in all of 2013 and 92 in
2012. Downgrades declined in 2013 to 864, from 1,299 in 2012.
Market stabilization is leading to lower CMBS delinquencies, loans continuing to
be resolved and a declining rate of downgrades. Property values continue to
stabilize leading to pool level loss expectations declining, priming CMBS for
more upgrades. That said, CMBS upgrades will likely be limited above 'A' due to
the risk of interest shortfalls.
Fitch may upgrade some A-M classes that were previously downgraded below 'A' due
to better than expected recoveries on specially serviced loans. Upgrades to 'BB'
and 'BBB' categories in older vintages are likely to occur as the pools pay down
and delinquency levels stabilize or decline.
Additional information is available in Fitch's weekly e-newsletter, 'U.S. CMBS
Market Trends', which also contains recent rating actions and an overview of
newly released CMBS research, including Fitch presales and Focus reports. The
link below enables market participants to sign up to receive future issues of