The majority of European commercial property loans that were part of secularization deals structured before the subprime crisis and which have since reached maturity in 2012 remain unpaid. Data from Fitch Ratings shows that the over 70% unpaid loans are the result of difficulties that both issuers and investors are facing on the European commercial real estate market. This affects commercial mortgage-backed securities deals structured between 2004 and 2006.
Only 24 of 122 CMBS loans that matured in the first 11 months of 2012 were fully paid at maturity, and another 12 were paid after maturity. The remaining loans are in a workout, at a standstill or have had their loan maturity extended. Unlike the US, where the CMBS marked has reportedly bounced back, there have been very few new issues in Europe. European bondholders will have to face lengthy workouts and restructuring in some cases.
Refinancing European commercial property loans is quite difficult at this time: property valuation have been on a downward trend while banks have focused on offloading real estate portfolios. Insurance companies and new funds have attempted to fill the funding gap caused by banks, but they are all focusing on buying prime property in high profile cities, such as London.
CMBS deals initially came with a gap of two or three years from the date the last loans matured and the final maturity of the bonds. But, as Alessandro Pighi and Mario Schmidt, of Fitch, explained, more loans were extended and legal final maturity of the bonds loomed, forcing CMBS servicers to find viable solutions, 'making forced sales more likely if the loan amendments did not improve the underlying collateral performance'.
The future is not looking brigther, as a record '31.9bn of CMBS loans hitting maturity is expected for 2013 and 2014, while hitting maturity dates and redeeming debt through refinancing or asset sales will remain particularly difficult in deals backed by secondary quality assets as well as those in Spain and Italy.
0 komentar:
Posting Komentar