S&P: US CMBS Q3 Upgrades Outpace Downgrades.Business Editors NEW YORK--(BUSINESS WIRE)--Standard & Poor's Nov. 6, 2002-Standard & Poor's Ratings Services Ratings Service A company, such as Moody's or Standard & Poor's, that rates various debt and preferred stock issues for safety of payment of principal, interest, or dividends. announced today that the number of upgrades edged out the number of downgrades among U.S. CMBS CMBS See: Commercial Mortgage Backed Securities transactions during the third quarter-the first time that positive activity has outweighed negative activity so far this year. There were a total of 43 upgrades and 40 downgrades during the most recent quarter, bringing the number of year-to-date upgrades and downgrades to 106 and 132, respectively. Despite the statistics from the third quarter, if the year ends with similar ratios, it will be the first time since 1996 that downgrades exceeded upgrades during a one-year period. However, an examination of the underlying actions and of the U.S. CMBS market indicates that the gap between positive and negative activity may close, meaning that the number of upgrades could even out with the number of downgrades by the end of the year. "Now that many of the Kmart credit-tenant lease (CTL See control key. 1. CTL - Checkout Test language. 2. CTL - Compiler Target Language. 3. CTL - Computational Tree Logic ) ratings have been removed and/or set to single-'D', the pace of the number of downgrades should slow," said Roy Chun, Managing Director in Standard & Poor's Structured Finance Surveillance group. "With the exception of a handful of markets and property types, real estate, in general, has been surprisingly resilient See resiliency. , despite the economy's uncertain state." This resiliency The ability to recover from a failure. The term may be applied to hardware, software or data. is reflected in the delinquency delinquency Criminal behaviour carried out by a juvenile. Young males make up the bulk of the delinquent population (about 80% in the U.S.) in all countries in which the behaviour is reported. rates, which have remained stable at or near the 2.0% level for the past two quarters after steady increases through most of 2001. Those increases were also heightened shortly after Sept. 11. If there are no other events that cause a spike A burst of extra voltage in a power line that lasts only a few nanoseconds. See power surge, power swell, sag and surge suppression. (jargon) spike - To defeat a selection mechanism by introducing a (sometimes temporary) device that forces a specific result. in delinquency rates for the remainder of the year, performance-related downgrades should not increase dramatically during the fourth quarter, Mr. Chun said. Additionally, the ratings on nine classes of CMBS transactions were set to single-'D' during the recent quarter, dropping from 14 in the second quarter. At the time, that number was almost equal to the total number of CMBS class ratings that had ever been set to single-'D'. All of the ratings that were set to single-'D' in the third quarter were due to interest shortfalls that were determined unlikely to be repaid, or would, at best, be outstanding for an extended period of time. This information is contained in a detailed report, "Structured Finance Global Ratings Roundup Quarterly: Third-Quarter Performance Trends," which is available on RatingsDirect, Standard & Poor's Web-based credit analysis system. The article is also available on Standard & Poor's Web site at www.standardandpoors.com. Go to "Fixed Income," under "Browse (1) To view the contents of a file or a group of files. Browser programs generally let you view data by scrolling through the documents or databases. In a database program, the browse mode often lets you edit the data. See Web browser. by Sector" choose "Structured Finance," and then under "Commentary & News" click on "More" and scroll To continuously move forward, backward or sideways through the text and images on screen or within a window. Scrolling implies continuous and smooth movement, a line, character or pixel at a time, as if the data were on a paper scroll being rolled behind the screen. See auto scroll. down to the desired article, dated Oct. 15. Standard & Poor's is a leader in providing highly valued financial data, analytical research and investment and credit opinions to the global capital markets. With more than 5,000 employees located in 18 countries, Standard & Poor's is an integral part of the world's financial architecture. Additional information is available at www.standardandpoors.com. Copyright 2002, Standard & Poor's Ratings Services |
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