Moody’s Investors Service said that the CMBS conduit transactions that it expects to rate in 3Q12 suggest that the average Moody’s Loan- to-Value (MLTV) ratio, which is the rating agency’s main measure of balloon refinance risk, will increase to 102.1% from 97.8% in the third quarter. Given this expected 4.3% jump, the MLTV in the third quarter will average above 100% for the first time in CMBS 2.0.

According to statistics through 1Q12, MLTV has remained stable, specifically in the mid-90s range, for five consecutive quarters. After this long period of stability, 2Q12 underwent a slight rise in leverage, which now is expected to be followed by a greater increase in 3Q12.

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