CMBS metrics mixed in fourth quarter.


According to Fitch Ratings, New York, legacy U.S. commercial mortgage-backed securities (CMBS) market metrics continued improving in fourth-quarter 2013, although several key indicators for new issuance trended negatively.

The Fitch quarterly index report said metrics for legacy U.S. CMBS continued to improve in the fourth quarter, with delinquencies falling by nearly 60 basis points in the fourth quarter and by 2 percentage points on the year.

"The continued steady pace of loan resolutions should position CMBS delinquencies to finish 2014 below 4 percent," said Fitch Managing Director Mary MacNeill.

The index reported the volume of loans in special servicing also fell, down by 7 percent on the quarter and by nearly 30 percent for the year. Fourth-quarter ratings actions held unchanged from the third quarter, with the majority continuing to be affirmations. Additionally, nearly 92 percent of investment-grade rating outlooks as of Dec. 31,2013, were "stable," largely unchanged from third-quarter 2013.

However, the Fitch report noted new issuance metrics moved in the opposite direction in the fourth quarter. Interest rates rose along with Fitch stressed loan-to-value (LTV) ratios. Additionally, the combined percentage of full and partial interest-only (10) loans increased by 7 percentage points (to 55 percent). The number of loans with subordinate debt also rose, up by more than 5 percentage points for the second straight quarter. Credit-enhancement levels finished the quarter 500 basis points higher for "AAAsf ' compared with...

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