01. August 2012 
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EMEA CMBS sees increased repayment activity in July
Fitch Ratings says in its latest European CMBS bulletin that there was an increased amount of repayment activity in July. Total debt of EUR900m was repaid (13 loans), coming from loans that were either due to mature during the month, or from those that were previously extended or in workout.
Most of the loans that repaid were expected to do so by Fitch. They were all either secured on prime quality assets in prominent locations, small-ticket loans with moderate Fitch LTVs, or benefiting from strong income under long leases. Consequently, while any repayment is a welcome reminder that finance can be sourced for solid commercial real estate propositions, the news does not allay Fitch's concerns about the prospects for secondary quality collateral, on which the bulk of the CMBS portfolio is secured.
After a bumper July, during which 32 loans fell due, only one matures in August. Despite not being too large a loan to put off a single lender (€16.1m), a high Fitch LTV and relatively short lease term represent shortcomings, and suggest timely refinancing is unlikely. However, with ten years until legal final maturity and a current DSCR of 1.85x, there may be sufficient flexibility to allow for a managed deleveraging, subject to reletting prospects.
Most of the loans that repaid were expected to do so by Fitch. They were all either secured on prime quality assets in prominent locations, small-ticket loans with moderate Fitch LTVs, or benefiting from strong income under long leases. Consequently, while any repayment is a welcome reminder that finance can be sourced for solid commercial real estate propositions, the news does not allay Fitch's concerns about the prospects for secondary quality collateral, on which the bulk of the CMBS portfolio is secured.
After a bumper July, during which 32 loans fell due, only one matures in August. Despite not being too large a loan to put off a single lender (€16.1m), a high Fitch LTV and relatively short lease term represent shortcomings, and suggest timely refinancing is unlikely. However, with ten years until legal final maturity and a current DSCR of 1.85x, there may be sufficient flexibility to allow for a managed deleveraging, subject to reletting prospects.
