Derivative Fitch: U.S. CRE CDO Performance To Remain Strong in 2007.NEW YORK New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of -- Fourth-quarter 2006 U.S. commercial real estate (CRE CRE Commercial Real Estate CRE Corporate Real Estate CRE Commission for Racial Equality (Scotland) CRE CCD (Charge Coupled Device) and Readout Electronics CRE Camp Response Element ) CDO (Collaborative Data Objects) A programming interface from Microsoft for accessing MAPI-based e-mail, calendaring and scheduling servers. Originally called "OLE Messaging" and "Active Messaging," CDO wraps the Enhanced MAPI library into a COM object that provides the performance continued its solid pace to end 2006 with a strong upgrade to downgrade ratio. Derivative Fitch expects this trend will likely continue throughout 2007. The Fitch rated CRE CDO universe increased to 113 transactions as of year-end (YE) 2006, up from 90 as of the September performance report due to the addition of hybrid and synthetic CRE CDO transactions and incorporation of 13 deals rated in the fourth quarter. Of note, nine of the 13 newly rated transactions were CRE Loan (CREL CREL Circular Regional Externa de Lisboa ) deals bringing the total issuance of CREL deals to over 52% of all CRE CDO and ReREMIC issuance in 2006. In the fourth quarter, Fitch upgraded 19 tranches and affirmed 71 tranches. No tranches were downgraded. 'Continuing the trend from the first three-quarters of the year, substantially all of the upgrades were to static CDOs comprised of rated CMBS CMBS See: Commercial Mortgage Backed Securities securities,' said Senior Director Karen Trebach. 'Improving credit quality of the underlying CMBS collateral, the seasoning of the portfolios, and the deleveraging of the CDO liabilities were the drivers of the upgrades.' Overall, the year-end statistics are strong: Fitch upgraded 196 tranches in 39 CRE CDOs and ReREMICs and downgraded only three tranches in two transactions. One transaction, G-Force 2003-1, was called late in the fourth quarter which had the effect of removing nine tranches as upgrades; otherwise, the upgrade to downgrade ratio would have been even stronger. With regards to CREL CDOs, Fitch has observed that they have tended to maintain their reinvestment Reinvestment Using dividends, interest and capital gains earned in an investment or mutual fund to purchase additional shares or units, rather than receiving the distributions in cash. 1. In terms of stocks, it is the reinvestment of dividends to purchase additional shares. cushions. Fitch affirmed four deals in the fourth quarter. One of the deals had slightly more reinvestment flexibility. However, upgrades during the reinvestment period are unlikely given that pool quality can change as new collateral is added. Fitch's ratings reflect migration to the worst case covenants. This press release updates Fitch's Sept. 25, 2006 performance piece, 'U.S. CRE CDO Performance: 2006 Update'. Additional information on U.S. CRE CDO performance is available in the Derivative Fitch report 'U.S. CRE CDO Performance: 2006 Update' at www.derivativefitch.com. For more information on individual managed CREL transactions, please refer to the CREL Surveyor Snapshots which are also available on Derivative Fitch's web site on the respective transaction's CDO SMART page, under Research. Fitch's rating definitions and the terms of use Terms of Use are rules set up by the owner of an intellectual property or service to govern how they may be legally used. In many cases, terms of service are used as a contractual agreement between a company and users of a service they provide. of such ratings are available on the agency's public site, www.derivativefitch.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures Policies and Procedures are a set of documents that describe an organization's policies for operation and the procedures necessary to fulfill the policies. They are often initiated because of some external requirement, such as environmental compliance or other governmental are also available from the 'Code of Conduct' section of this site. Fitch means Fitch, Inc., Fitch Ratings Fitch Ratings An international rating agency for financial institutions, insurance companies, and corporate, sovereign, and municipal debt. Fitch Ratings has headquarters in New York and London and is wholly owned by FIMALAC of Paris. , Ltd. and their subsidiaries including Derivative Fitch, Inc. and Derivative Fitch Ltd. and any successor or successors thereto. |
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