Repayments of European CMBS loans increased in July as debt totalling €900m was repaid, according to Fitch.
In the ratings agency’s August monthly bulletin, it said that the repayments came from loans that were either due to mature during the month, or from those that were previously extended or in workout.
It added that most of the repayments were expected as the loans were all either secured on prime quality assets in prominent locations, small-ticket loans with moderate LTVs, or benefited from strong income under long leases.
It added: “Consequently, while any repayment is a welcome reminder that finance can be sourced for solid commercial real estate propositions, the news does not allay Fitch’s concerns about the prospects for secondary quality collateral, on which the bulk of the CMBS portfolio is secured.”
After a bumper July, during which 32 loans were due, only one loan totalling €16.1m will mature in August.
Despite the modest size of the loan, Fitch said that a timely refinancing is unlikely because it has a high LTV and relatively short lease term, but is hopeful of a managed deleveraging because of the 10-year tail period until legal final maturity.
bridget.o’connell@estatesgazette.com
