Percentage of commercial loans paying off at maturity rises, remains under 50%
Trepp, a provider of commercial mortgage-backed securities data, said 42.4% of CMBS loans managed to pay off on their scheduled balloon dates in June, up from 34% in May but still well below the 50% mark. The increase in loans making their balloon payments on time arrives after the analytics firm reported two consecutive months of declines in the percentage of borrowers able to pay their loans at the maturity date. The June pay-off percentage rate was well above the 12-month rolling average rate of 39.6%, suggesting more borrowers were able to meet the terms of their loans. When evaluating the data by loan count, as opposed to balance, 56.1% of all loans paid off in June, up from 48.1% in May, according to Trepp Despite the firm noting an upward trend in the number of loans making their scheduled balloon payments, the payoff percentage is still well below 2008 levels when more than 70% of borrowers met the demands of their payment schedules, Trepp said. Write to Kerri Panchuk.