NEW YORK, NY -- Over the last few months, the story in the
CMBS world has been one of spread tightening, falling delinquency rates, and
spikes in new issuance.
CMBS delinquencies peaked at 10.34% in the middle of 2012,
largely due to a flood of maturing bubble-era loans, many of which were
over-levered to start with and ultimately struggled to find refinancing.
As that tide receded in the second half of 2012, the
delinquency rate slowly but surely dropped (to 9.42% in February), as did
spreads on legacy and new-issue CMBS bonds.
All of these developments were positives for the industry,
and the outlook for 2013 remains highly optimistic as investors expect $80
billion or more in new issuance on the year. That would b almost double the
total for 2012 and the highest level since the peak of approximately $230
billion in 2007.
Despite all the good news, one category that continues to
lag is the 2007 vintage. While we suspected this, one longtime reader urged us
to look at the numbers. Their thesis was that for the 2007 loans, "the
bathtub is still filling up as quickly as it is emptying."
This idea is largely correct. Despite a steady dose of
modifications (which lead to loan cures) and resolutions of distressed assets,
both of which should push the rate lower, the delinquency rate on 2007 fixed
rate conduit loans remains well into the double digits.
Above is a chart of the delinquency rate, outstanding
current, and outstanding delinquent balances since 2010. The universe is fixed
rate, conduit loans that were securitized in 2007 deals.
For a complete copy
of the company’s news release, please contact:
Eric R. Gerard
Senior Vice President
Great Ink Communications
27 Union Square West, Suite 205
New York, NY 10001
(212) 741-2977
No comments:
Post a Comment