S&P: CMBS Surprisingly Strong

The delinquency performance of North American commercial mortgage-backed securities last year was impressive and "somewhat surprising" in view of the economic slump, according to Standard & Poor's.The CMBS suffered 178 downgrades in 2002, nearly triple the number of the previous year, but more than half of the downgrades in the fourth quarter were attributable to bonds whose ratings are dependent on the ratings of other companies, S&P said. "Excluding the dependent transaction-related activity, rating actions for the quarter were more positive than negative, as upgrades surpassed downgrades by a ratio of 1.75 to 1," said Roy Chun, a managing director in S&P's structured finance surveillance group. "Additionally, the delinquency rate remained low and held steady for most of the year. It peaked early in the year at about 1.6% and has stayed generally flat, despite the weakness in the economy and real estate markets." The information is contained in S&P's Structured Finance Global Ratings Roundup Quarterly for the fourth quarter.