Fitch: CMBS Delinquencies Creep Higher

Delinquencies on mortgages supporting commercial mortgage-backed securities increased 2 basis points to 0.43% in July, according to a Fitch Ratings loan delinquency index. The rating agency pointed to "substantial differentiation" in the performance of small-balance pools, which typically have loans ranging from $150,000 to $15 million. "For instance, Fitch's year-to-date upgrade-to-downgrade ratio of 2.5-to-1 for traditional CMBS was driven to 1.5-to-1 when small-balance transactions were factored in," said Susan Merrick, a Fitch managing director who heads the rating agency's U.S. CMBS group. Fitch also said a high concentration of delinquencies (15.4%) in the index is represented by transactions issued in 1998, many of which have a large percentage of loans with 10-year terms. Fitch can be found online at http://www.fitchratings.com.