S&P Puts 744 U.S./Canadian CMBS Ratings on CreditWatch

Standard & Poor’s Corp. Tuesday said it could change up to 744 U.S. and Canadian commercial mortgage-backed securities ratings in the next six months, with 405 ratings possibly dropping and 317 ratings potentially increasing.

S&P said 384 of the CreditWatch Negative ratings placements and 309 of the CreditWatch Positive ratings placements are in the United States. (There are 6,806 S&P CMBS ratings in total in the United States, as compared to 265 in Canada.)

The company in a press release said the moves would affect CMBS with an aggregate/current issuance balance of $101.8 billion and 10.5% of S&P’s total U.S./Canadian CMBS ratings.

The CreditWatch actions stem from criteria changes aimed at improving and “harmonizing” commercial real estate evaluations on a global basis.

Recent vintage transactions will undergo reviews first, with reviews considering collateral performance as well as the criteria, which also link other factors to performance.

The ratings agency said the reviews would be done using the following broad vintage categories: 2008 to current, 2007, 2006, 2005, and 2004 and earlier.