Fitch: New U.S. CMBS Revealing an Increasing Divide

NEW YORK--(BUSINESS WIRE)-- Link to Fitch Ratings' Report: Lower Credit Enhancement Not Warranted in Recent U.S. CMBS Transactions

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=866305

Conventional wisdom for new U.S. CMBS deals dictates that credit enhancement goes up as loan quality slips, though a new report from Fitch Ratings shows a few recent deals moving against that theory.

A study of recent CMBS transactions that Fitch was asked not to rate is showing that credit enhancement levels declined despite the fact that collateral credit quality did not improve and in some cases declined.

The transactions in question are as follows:

--COMM Mortgage Trust, 2015-CCRE23

--CSAIL Commercial Mortgage Trust, 2015-C2;

--Wells Fargo Commercial Mortgage Trust, 2015-C28; and

--GS Mortgage Securities Trust, 2015-GC30.

The common denominator is two-fold, according to CMBS group head Huxley Somerville. 'Not only was credit enhancement for each of these CMBS deals insufficient for Fitch to rate at, but the deals were not that different in quality to earlier transactions that Fitch had rated from each of these shelves,' said Somerville. Had Fitch rated each of these four CMBS deals, either the credit enhancement would have been higher at each rating level or the ratings themselves would have been lower.

'Lower Credit Enhancement Not Warranted in Recent U.C. CMBS Transactions' is available at 'www.fitchratings.com' or by clicking on the above link.

Additional information is available at 'www.fitchratings.com'

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE '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 ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.

View source version on businesswire.com: http://www.businesswire.com/news/home/20150608005846/en/

Fitch Ratings
Huxley Somerville
Managing Director
+1-212-908-0381
Fitch Ratings, Inc., 33 Whitehall Street, New York, NY 10004
or
Media Relations:
Sandro Scenga, +1-212-908-0278
[email protected]

Source: Fitch Ratings

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