Class G of LNR CDO III Ltd./Corp., a commercial real estate collateralized debt obligation, has been downgraded from BBB-minus to BB by Fitch Ratings and removed from Rating Watch Negative. Fitch also removed classes B through F from Rating Watch Negative and affirmed the ratings on eight other classes in the deal, which is primarily backed by B-pieces of commercial mortgage-backed securities. The rating agency said it believes investment-grade CMBS "will perform well even in a heightened stress environment," but that the risks facing first-loss and junior-rated bonds in CMBS have risen along with expectations of an increase in commercial real estate defaults.
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