Nine new delinquent loans led to the third straight monthly increase in the U.S. commercial real estate loan (CREL) CDO delinquency rate to 2.39% for September 2008, according to the latest CREL CDO Delinquency Index (CREL DI) from Fitch Ratings.
'Although this delinquency rate remains relatively low and many CREL CDOs are adequately cushioned to absorb some credit deterioration, some CDOs are experiencing more distress than others,' said Senior Director Karen Trebach. CREL CDO delinquency rates range from 0% to 14%. Fitch recently downgraded the below investment grade classes of one CREL CDO, and within the past three months, Fitch has also placed classes from two other CREL CDOs on Rating Watch Negative. Fitch anticipates that more CREL CDOs will be placed on Rating Watch Negative or downgraded as further problem loans come to the surface.