U.S. commercial mortgage-backed securities activity last year fell 7% short of expectations, with aggregate issuance hitting $32.7 billion, according to Standard & Poor's. Analysts projected $35 billion of CMBS issuance for 2011, and S&P now expects issuance for this year to come in at about $35 billion, but headwinds from the global economy could effect yearly activity. The ratings agency blames market uncertainty in 2011 for interrupting what was supposed to be a more robust year of CMBS issuance, after just about $12 billion was issued in 2009 and 2010 combined. "With the resumption of issuance in 2009 and its continued expansion in 2010, we had expected a substantial rise in issuance in 2011," said David Mollin, Standard & Poor's credit analyst. "Although activity did increase markedly early in the year, the pace of issuance has since slowed amid the uncertainty and volatility resulting from the European debt crisis and other macroeconomic events." CMBS issuance returned in 2009 after dormancy during the financial crisis. When it returned, single-borrower transactions represented most of the new activity. Those deals and conduit transactions still make up a majority of the issues getting to market. Still, S&P noted that larger-loan pooled transactions have returned in the past couple of years. Analysts said issuers are now starting to consider financing vehicles backed by seasoned performing, subperforming and nonperforming loans. Write to Kerri Panchuk.