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Fitch: Commercial CDO Delinquencies Take A Dip

NEW YORK CITY-Late-pays declined significantly to 12.6% in June 2011 from 14.1% in May, resulting in the largest monthly drop since October 2007, according to a new report from Fitch Ratings.

By Jacqueline Hlavenka | Updated on July 15, 2011

NEW YORK CITY-After Fitch Ratings predicted that CMBS fundamentals are slowly stabilizing this year, the latest index results from the global ratings agency shows that delinquencies for US commercial real estate loan collateralized debt obligations (CDOs) saw their largest decline in almost four years. The new report notes that late-pays declined to 12.6% in June from 14.1% in May, making it the most significant drop since October 2007.

One of the reasons for the delinquency decline is related to the disposal of 25 troubled assets from the index this month. The removed assets included: four matured balloons, which were recently extended; two term defaults brought current; two loans that were repurchased in the prior month; three defaulted B-notes; six impaired CMBS with prior interest shortfalls; four mezzanine interested foreclosed out; four assets sold at discounts from 21% to 54%.

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