S&P: CMBS Downgrades Hit 4-Year Low

Downgrades on commercial mortgage-backed securities deals in the second quarter hit the lowest quarterly level since the fourth quarter of 2001, according to Standard & Poor's.This has been aided by investor interest in CMBS securities that resulted in investors' "funneling capital into performing as well as underperforming and speculative properties," as well as "a historically low CMBS delinquency rate," according to S&P analysts Roy Chun and Larry Kay. Delinquencies on CMBS fell to 0.93% in the second quarter, a level last seen in 2000, S&P said. There were 22 downgrades on CMBS in the second quarter, down from 43 in the first quarter and an average of 41 per quarter last year, the rating agency said. There were also 153 CMBS upgrades last quarter, up from 99 in the last quarter of 2004. The rating agency said it expects the positive upgrade performance to continue.