Fitch: More IOs Mean Less Upgrades for U.S. CMBS.CHICAGO -- While upgrades will continue to vastly outweigh downgrades for U.S. CMBS CMBS See: Commercial Mortgage Backed Securities in 2007, the increased presence of interest-only (IO) loans likely means that the ratio of upgrades to downgrades will decline in the long-term, according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. a report by 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. . 'Deals issued last year averaged 70% of full or partial interest-only terms in a CMBS pool, compared with 60% in 2005,' said Senior Director Britt britt n. Variant of brit. Noun 1. britt - the young of a herring or sprat or similar fish brit young fish - a fish that is young 2. Johnson. 'As these deals will amortize more slowly than more seasoned transactions, the number of upgrades will drop unless the low interest rate environment lasts and there continues to be a significant amount of defeasance.' U.S. CMBS upgrades reached record highs in 2006. Fitch upgraded 1,781 tranches and downgraded 52 among approximately 500 CMBS deals (34:1 upgrade-to-downgrade ratio, compared to 11:1 in 2005). 'Defeasance continues to be a major factor in upgrades, and the amount of loan defeasance continues to rise,' said Johnson. 'Other contributors will include the continued strong performance of underlying real estate, collateral prepayments and scheduled amortization. '2006 CMBS Upgrade and Downgrade Review' is available on the Fitch Ratings web site at www.fitchratings.com. 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.fitchratings.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. |
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