The FINANCIAL — London-03 October 2011: Fitch Ratings says in its latest European CMBS bulletin that its European CMBS Maturity Repayment Index changed only marginally during September, increasing to 41.7% from 41.1% in the previous month, due to full and partial redemptions totalling EUR140.9m.
This slight change is explained by the fact that only two loans reached their maturity dates during the month. Combined with the redemptions, this resulted in the outstanding matured balance decreasing by 0.9% to EUR9.53bn.
Two of the four loans scheduled to mature in September were fully redeemed well ahead of their respective maturity dates, one through a prepayment (Grosvenor Chaussee d'Antin, FCC NACREA) and the other through a repurchase by the originator (Loan 4589, Morrigan CMBS 1). Both of the other loans that reached their maturity dates – Henderson 2 (Weiterstadt), EuroProp (EMC-VI) and Brisk, Victoria Funding (EMC-III) – failed to meet their payment obligations. The former is in a one-month standstill period, while the latter has been transferred to special servicing for workout.
The largest principal distribution during the month resulted from the sale of the collateral for the St Katherine's Dock loan (Taurus CMBS (UK) 2006-2), which matured in July 2010. The sales price of GBP156.3m agreed with the Max Property Group was significantly above the most recent value of GBP115.8m and resulted in a full redemption of the outstanding GBP84.9m securitised loan balance.
The only other full redemption to occur during the month was of the EUR15.5m Senior & Junior Monaco loan (JUNO (Eclipse 2007-2)), which repaid a few weeks after its scheduled maturity date of 10 August, following a sale of the collateral. The loan was secured by two floors of a Monaco office building, both fully let to Merrill Lynch on a lease expiring in 2016 (with no break options).
While both redemptions have had a positive effect on the Index, their impact is exaggerated due to the small number of loans that matured during the month. Fitch expects this trend to be reversed in October, when 31 loans are scheduled to reach either a first or an extended maturity date. This is consistent with the deterioration in the Index observed earlier in the year following the months of January, April and July, when a large number of loans also matured. Fitch's expectation also reflects the low average quality of the collateral securing the loans maturing during October and the continued constrained availability of new debt for such assets.
Fitch's Maturity Repayment Indices are incorporated into the agency's 'European CMBS Loan Maturity Bulletin', which provides data and commentary on loans backing European CMBS that are due to mature during the month. The bulletin supplements the agency's ongoing rating analysis and surveillance services and is available at www.fitchratings.com. It also looks at the status of loans that reached their maturity in previous months. Data on loan maturities is also available for download in Excel format.
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