Delinquencies on CMBS continued to climb in February, but new issuance may help to stem future late-pay increases, according to the latest index results from Fitch Ratings.

Delinquencies rose 17 basis points last month to 8.76%, surpassing the index's previous high water mark of 8.66% recorded in September 2010.

Fitch managing director Mary MacNeill said in a press release that a projected “spike” of new issuance will help to offset paydown and liquidations in 2011 and thus slow the shrinking of Fitch's rated portfolio.

February marked only the second time in 32 months that Fitch Ratings' portfolio has grown. Without the addition of three new transactions to the index, the delinquency rate would have risen an additional 10 basis points during the month.

Fitch said the reduction in the amount of CMBS outstanding has had a “meaningful impact” on the delinquency rate. Repayments, liquidations, and scheduled amortization have led to a decline of more than $90 billion since mid-2008. This contraction accounts for over 150 basis points of the current delinquency rate.

New delinquencies in February totaled $2.6 billion, including five loans greater than $100 million. Each of these loans had already been in special servicing due to an imminent default:
Resolutions in February 2011 totaled $1.7 billion, and included three loans with balances in excess of $100 million.


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