Fitch Ratings placed $20.6 billion in bonds in 33 floating-rate CMBS deals on Rating Watch Negative.

The rating agency has also assigned Negative Rating Outlooks to 22 ‘AAA’ and 'AA+' rated classes, which is equivalent to $1.1 billion.

The  Rating Watch Negative placements were caused by the consideralbe stress on  cash  flow  experienced by floating-rate loans in 2009 as well as Fitch’s expectation that cash flows will continue to be stressed for the foreseeable future.

Floating-rate  loans  are transitional in nature and more vulnerable to the declining market  conditions compared with  stabilized properties usually found in  conduit  deals.  Many  floating-rate  loans  have not reached stabilization  and/or  have   experienced considerable declines  in
performance since the agency’s last rating action.

Many recent vintage  floating-rate  deals also have high concentrations of hotels, particularly the luxury sector.

In  total, Fitch rates 34 floating-rate  deals. Before this action,  the agency placed $4.9 billion or 143 classes from 14 deals on Rating Watch Negative because of  expected performance declines.

The details of the Rating Watch Negative placements are as follows: $14 billion (123 classes) rated ‘AAA’; $4.9 billion (184 classes) rated ‘AA’ and below; $1.7 billion (97 classes) currently rated below ‘BBB-'.

The rating agency will be  performing  a loan-by-loan analysis that covers a review of the most  recent  financial  information,  market  updates  as well as prospective reviews  of  future  performance  to  resolve  the Rating Watch Negative designations.

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