Bloomberg News

Most European CMBS Could Fail To Repay By End 2012, S&P Says

November 01, 2011

Nov. 1 (Bloomberg) -- About 60 percent of loans in European commercial mortgage backed securities that mature by the end of 2012 won’t be repaid, according to Standard & Poor’s.

The ratings firm said it added two more loans to its delinquency and special servicing list in September and “we expect this number to rise in October,” according to a statement.

Of the 183 loans that are due to mature by the end of 2012, 108 have reported loan-to-value ratios of more than 70 percent, S&P said.

Based on that data “we believe that it’s reasonable to conclude that borrowers may struggle to repay nearly two-thirds of the loans that are scheduled to mature between now and end 2012,” said S&P credit analyst Judith O’Driscoll.

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