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Fitch Upgrades 26% of CMBSs Reviewed in 2000, Downgrades 4%

NEW YORK CITY-Most of the upgrades resulted from increases in subordination levels resulting from paydowns. Downgrades affected the health care industry, retail factory outlets, credit tenant lease deals and limited service hotels.

By John Howe | Updated on March 19, 2001

NEW YORK CITY-Fitch, the international rating agency based here, upgraded 26% of the 298 commercial mortgage-backed securities reviewed last year, down slightly from the 28% upgraded in 1999. As in the past, the majority of the upgrades are attributed to increases in subordination levels resulting from paydowns. Seventy-two percent of the upgrades involved tranches that previously had investment-grade ratings. The value of the securities totaled $124.3 billion.

Downgrades, on the other hand, accounted for only 4% of the reviews, a total of 12. Except for two downgrades with ratings moving from BBB to BBB-, all the others occurred on below-investment-grade classes. Market sectors affected included the health care industry, retail factory outlets, credit tenant lease deals and limited service hotels.

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