The committees that have been filtering transaction proposals for Fitch Ratings since the first quarter of 2009 began registering their first formal rejections of global commercial MBS securities proposals during the third quarter.
The development brings Fitch's cumulative proposal rejection rates for the CMBS sector to 3%, as compared to 7.4% for residential MBS.
Concerns in the U.S. were among the catalysts for the spike in CMBS rejections in the third quarter, Stuart Jennings, managing director at Fitch, told this publication, when asked about the factors that drove it.
“The U.S. CMBS sector is seeing more proposals for large loan floating-rate deals of late, which contain more volatile collateral and unstable income,” he said.
When asked about how U.S. CMBS have fared compared those in other markets, Jennings used Fitch's traffic-light color designations to describe the situation, noting, “The majority of EMEA CMBS proposals [have been] denoted as amber or red over the last few months, whereas most U.S. CMBS proposals have proceeded as green.”
