Although refinancing risk for European CMBS deals is expected in another couple of years, market sources said that a more immediate concern for bondholders is the alarming rate of tenant defaults.

James Zanesi, an analyst at Unicredit, said that in 2009 the bank has monitored 47 downgrades in U.K. CMBS and 15 downgrades in other European deals (versus only two upgrades in Victoria Funding (EMC III) Plc).

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