The total volume of securitized commercial mortgage loans that reach maturity during the coming months is roughly $14 billion, according to Fitch Ratings, and the prospects are positive.
The good news is that most of these about-to-mature U.S. CMBS loans are decade-old vintages that “should repay without a hitch,” said Fitch senior director, Karen Trebach.
Low interest rates and robust conduit issuance, the two main factors that have positively affected
Fitch’s newest quarterly U.S. Commercial Mortgage Market Index findings show that of the $14.4 billion in Fitch-rated performing conduit loans set to mature this year $3.2 billion are defeased, which is equal to 22.2% of the total or nearly one-fourth of these loans.
Fitch reports, however, that up to $9.3 billion in loans that already
Another $20.9 billion of loans that have an original maturity date beyond 2013 are also currently delinquent, including $16.7 billion in ten-year loans from the 2006-2007 vintage.
While it is not clear how these loans will perform going forward, analysts argue, loans from the 2006 and 2007 vintages, which represent about 20% of 2013 maturities, “have significantly higher leverage.”
At the same time the performance of earlier vintages has been consistent, as many 2003-2004 loans have been amortizing for about nine years and “the overall initial leverage wasn’t egregious,” Trebach said.
“Roughly 60% of loans maturing in 2013 were originated in 2003 and 2004, including 16% which are already defeased,” she said.
