Defaults on commercial mortgage-backed securities are likely to start rising, thanks to deals issued in the last few years that contain higher concentrations of interest-only loans and higher levels of debt, according to Fitch Ratings.The rating agency also said it expects the "cumulative vintage 10-year average default rate" to be higher than the current 7.88% level. "Though CMBS collateral will continue to perform well this year, defaults will begin to increase incrementally beyond 2007 as loans with high loan-to-value ratios continue to be added to new CMBS transactions," said Britt Johnson, a Fitch senior director. Default levels were the highest on multifamily properties last year, and Fitch said it expects some markets, such as South Florida, to experience higher than historical levels of defaults. Fitch can be found online at http://www.fitchratings.com.

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