Fitch is registering some concern about what it describes as a “very rapid rise” in the number of U.S.
“Large-loan CMBS deals of late are coming to market with some average assets and aggressive assumptions,” Fitch’s CMBS group head Huxley Somerville said in a press release, noting that over $11 billion of these are likely to come to market in the first four months of this year, as compared to $11.2 billion for all of 2012.
“Because large-loan CMBS deals hinge on the performance of one asset, it increases the potential exposure for investors if that asset is merely average in quality,” said Somerville.
“If credit protection is insufficient, exposure to a mediocre property may lead to downgrades on investment grade classes if the asset fails to perform.”
