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April 14 (Reuters) - (The following statement was released by the rating agency)
U.S. CMBS loan defaults dropped for the fourth consecutive year and to their lowest level since 2008, according to Fitch Ratings in its annual U.S. CMBS loan default study.
Fitch reported an annual default rate of 0.9% for CMBS in 2013 (compared with 1.2% in 2012). ‘The broader commercial real estate markets are stabilizing and healthy new CMBS issuance volume is providing ample liquidity,’ said Managing Director Mary MacNeill.
Annual CMBS defaults dropped 26% in 2013 and finished the year 75% lower than peak levels in 2010. In total, 353 loans with a balance of $5.4 billion defaulted in 2013, compared with 557 totaling $7.3 billion in 2012 and 950 totaling $13.8 billion in 2011. ‘Office defaults topped all property types in 2013 and will remain under pressure due to high unemployment, slow job growth and tenants requiring less space per employee,’ said MacNeill.
Cumulative defaults in 2013 were 13.5% (totaling $84.2 billion). Fitch expects the rate of cumulative CMBS defaults to hold fairly steady with less than 50 basis points movement by year-end.
Fitch’s ‘U.S. CMBS 2013 Loan Default Study’ is available at ‘www.fitchratings.com’ or by clicking on the below link.
Link to Fitch Ratings’ Report: U.S. CMBS 2013 Loan Default Study (Stable Performance to Continue)