Jan 13 (The following statement was released by the rating agency)
The U.S. CMBS delinquency rate could fall another two percentage points to below 4% by year's end should the pace of resolutions continue and new issuance remain strong, according to Fitch Ratings.
Delinquencies improved by roughly two percentage points in 2013 having started the year at 8%, and expected to close it out at just under 6%. Fitch expects this pace to continue in 2014 and considers a year-end delinquency rate below 4% likely. This would be the lowest level since October 2009.
Several key factors likely to contribute to a 2014 drop in delinquencies include bulk asset sales by CWCapital, sales of real estate owned (REO) inventory and a relatively small pipeline of Fitch-rated loans coming due in 2014 (under $20 billion).
By property type, hotels could potentially see the largest drop in delinquencies in 2014 by as much as four percentage points. Delinquency rates for the other major property types are expected to fall by around two percentage points each.
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 the E-newsletter: