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).
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