S&P says European CMBS market remains under severe stress, downgrades 43 more tranches
Standard & Poor’s today lowered its credit ratings on 43 European commercial mortgage-backed securities (CMBS) tranches and affirmed 19 ratings.
“The rating changes result from our assessment of the effect on these transactions of the unprecedented events in European real estate, including drops in property values in some markets that have exceeded those of the 1930s.”
“The difficulties for European banks and their real estate exposure have contributed to a shortage of real estate debt capital and we believe this could endure for a substantial period of time. Although borrower net operating income has generally held up, we believe economic difficulties will continue to exert downward pressure on debt service coverage ratios.”
In our view, the market remains under severe stress, with no obvious refinance route for more than one-third of outstanding debt in European real estate
finance.
For the full list of rating actions see “S&P’s Ratings List For European CMBS Transactions – Feb. 8, 2010 Review. (Premium)
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