The precipitous fall in UK and continental European property values – in some cases 20% and higher – in the months since the sub-prime crisis began to bite has put pressure on a handful of commercial mortgage-backed securitizations. Refinancing risk is the greatest spectre in the CMBS market, with some deals facing dire consequences if banks remain tight-fisted with their cash in the next 12 to 18 months.
Fitch Ratings has put five tranches of four deals on outlook negative, citing refinancing risk as the main concern (see box). Deals from Credit Suisse, Deutsche Bank, Lehman Brothers and Morgan Stanley have all been flagged as headed for trouble if the credit markets’ stagnation develops into a fully fledged downturn.
| CMBS deals on outlook negative because of loan refinance risks |
|
Tranche |
Rating |
Rating agency |
Date |
| Deco 8-C2 |
G |
BB |
Fitch |
16 Jan ’08 |
| Euro 26 |
H |
BBB+ |
Fitch |
16 Jan ’08 |
| Titan 2006-CT1 |
H |
BB |
Fitch |
16 Jan ’08 |
| Titan 2006-CT1 |
J |
B |
Fitch |
16 Jan ’08 |
| Windermere VIII |
E |
BB |
Fitch |
16 Jan ’08 |
| Source: Citi |
"The property market has moved, particularly in the UK, where we’ve seen declines in value," says Andrew Currie, managing director at Fitch in London. "In January we did a review of all the 2006-07 vintage loans to UK property – 38 CMBS deals. Out of those we put five tranches of four transactions on outlook negative. That’s not a negative movement on the rating, but as we get closer to refinancing and as the market has already moved, our outlook on those ratings has declined."
You do not currently have access to this content, to gain access visit the subscription page or call our hotline on +44 (0)207 779 8999.
Are you already registered? If so, please enter your username and password here to continue.
Know your email address?
Click here for your password.
Questions about your subscription status?
Email us or call: +44 (0) 20 7779 8888
Subscribers to Euromoney benefit from:
- Exclusive access to euromoney.com - Read the latest issue early online, search for specific developments by region or sector, interrogate the results of Euromoney's benchmark polls, and view the archive dating back to 2000.
- 12 monthly issues of Euromoney magazine
- More than 30 specialist research guides free
- The results of Euromoney’s polls and surveys
Click here to subscribe
Because the financial sector is oversupplied with information, facts and figures and daily emails, you need one trusted source that will keep you updated on many markets. Reading Euromoney will save you time, save you money, help you spot new business opportunities and minimise risks to your existing operations.Every issue gives you a concise yet detailed update on the key developments from your specialist sector whilst keeping you informed of what is happening in other core areas.
Your free trial will bring you -
Exclusive interviews: Read what the best minds in the markets are thinking. Euromoney speaks to CEOs, Finance Ministers and Central Bank Governors so that you get first hand details behind the success or failure of the world's leading institutions and nations.
In-depth features: Get the detail, data and analysis behind the headlines that other financial press don't have time to provide. Our journalists give you the legal, regulatory and market considerations that are driving developments in the global capital marlets.
Market Insight: You get insight that data screens just don't give you. Our journalists based in the local markets, as well as the major financial centres, get you closer to the action. Helping you spot market trends, threats and opportunities, and sharing insights into the latest developments shaping the world you work in.
Don't miss out on this offer. Take a free trial today!
Click here to take a online trial