The annual default rate of conduit loans in CMBS transactions rated by Fitch Ratings was .72% in 2002, stated the latest conduit loan study published by the rating agency. Furthermore, the default rate is expected to rise to only .9% by end of this year.

Mary MacNeill, senior director at Fitch, said that despite expectations of rising defaults in 2003, CMBS investors should remember that in Fitch-rated transactions fewer than 3% of the almost 30,000 loans in the CMBS deals reviewed in this study have ever experienced a monetary default.

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