Outlook stable for majority of Fitch-rated CMBS

Fitch Ratings said more investment-grade commercial mortgage-backed securities remain stable despite looming losses, based on stabilizing commercial real estate fundamentals overall. Analysts said 88% of these bonds have a stable outlook after the ratings agency’s most recent review of its rated CMBS portfolio. “While delinquencies are still expected to increase and most losses have yet to be realized, Fitch’s CMBS ratings are expected to remain largely stable,” according to Managing Director Mary MacNeill. In November, Fitch adjusted its ratings criteria for the securities, saying analysts will look more closely at property valuations and loss-coverage multiples when assigning ratings for fixed-rate CMBS transactions. Through June 30, Fitch affirmed ratings on 1,417 classes of CMBS, downgraded 1,257 and upgraded 84. Following these changes, 50% of the firm’s rated CMBS portfolio remains investment grade, with 97% of triple-A classes assigned a stable outlook. A year ago, 57% of the portfolio was investment grade, yet just 45% carried a stable outlook, including 91% of triple-A bonds, according to Fitch. Write to Jason Philyaw.