Fitch Ratings' latest U.S. CMBS loan delinquency index is down the rating agency reported last week. The slow pace of the restoration in the Gulf Coast areas affected by Hurricane Katrina is a factor, added Fitch.

Katrina-related delinquencies are currently at roughly $201.8 million, decreasing from $268.9 million peak in December 2005. A little over 18% of Katrina-related delinquencies ($36.5 million) are real estate-owned properties, Fitch noted. However, Fitch Senior Director Patty Bach said, "Fitch is concerned regarding the outlook for the region as clean-up and rebuilding is reported to be moving slowly."

Fitch's U.S. CMBS loan delinquency index dipped five basis points this month to 0.71% overall. The three basis point decrease is due to the addition of five new deals, equivalent to $11.5 billion, to the deal universe. The remaining two basis point drop is due to loans falling out of the index as they become less than 60-days delinquent or are paid off, defeased, or liquidated.

The seasoned delinquency index, which does not include transactions with less than one year of seasoning, decreased four basis points this month to 1%. Meanwhile, the seasoned index is also affected by the addition of new deals as they age; this month newly seasoned deals accounted for one basis point of the total drop, according to Fitch.

(c) 2006 Asset Securitization Report and SourceMedia, Inc. All Rights Reserved.

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