CMBS defaults fall and spreads tighten
Commercial mortgage-backed securities are benefiting from tightening spreads and a slowing loan default rate, analysts said this week. Trepp, an analytics firm that measures CMBS, reported that the CMBS market on Thursday "had one of its best days in recent memory," Trepp wrote that spreads on super seniors fell 20 to 35 basis points. Meanwhile, Fitch Ratings said cumulative CMBS defaults hit 12.4% in the third quarter. To date, CMBS defaults are half of what they were for the entire year of 2010, suggesting the rate is slowing down, according to Fitch. "Though large high-profile loans are still defaulting, 2011 is on track to have fewer defaults than last year," Fitch concluded. The firm added that the default decline is signaling a new found level of stability in the markets within the CMBS segment. Newly defaulted commercial real estate loans for 2011 are now valued at $11.4 billion, compared to $22 billion for all of 2010. Write to Kerri Panchuk.