The issuance volume of U.S. commercial mortgage-backed securities is likely to reach a new record this year, due to low interest rates, high liquidity, and strong underlying real estate fundamentals, according to a credit analyst with Standard & Poor's Ratings Services.Kim Diamond, a managing director in S&P's Structured Finance Ratings Group, said CMBS issuance in 2005 may exceed $100 billion "by a fairly significant amount." (U.S. CMBS issuance totaled more than $90 billion in 2004.) Ms. Diamond said U.S. CMBS has been one of the best-performing fixed-income sectors for the past two years. The performance of the CMBS market's underlying commercial mortgage collateral has improved due to the recent recovery of the U.S. economy, according to Ms. Diamond. Credit analyst Roy Chun, a managing director in S&P's Structured Finance Surveillance Group, said the rating performance of the CMBS sector "is expected to remain strong for the rest of the year as property markets continue to improve and real estate remains an attractive investment vehicle." S&P can be found online at http://www.standardandpoors.com.

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