Loans in commercial mortgage-backed securities conduits rated by
“Q1 loans are benefitting from a higher-than-normal [Moody’s adjusted] DSCR relative to their [Moody’s adjusted loan-to-value ratio],” said Tad Philipp, Moody's director of commercial real estate research and author of the quarterly report, in a press release.
"Although MLTV indicates that Q1 loan quality is consistent with the 2005 vintage, the higher MDSCR, in combination with recovering property fundamentals, aligns overall credit quality more closely with the 2004 vintage,” he added.
The report also noted that the share of loans with an interest-only period, which Moody's views as a bellwether of underwriting quality and credit, reached 42% in Q1. This is a post-downturn CMBS high, according to Moody’s.
The company found that of partial-term IO loans, the share with IO periods longer than 57 months was almost 50%, roughly the same as it was at the 2007 peak, although the share of loans with IO periods was then much higher.
