US CMBS underwriting deteriorated in Q1, says S&P

US skyscraper
By David Bell
03 Apr 2018

After improving last year, credit metrics in the US CMBS market have worsened in the first quarter of 2018, according to S&P Global Ratings, with new deals showing higher leverage, more interest only loans and lower debt service coverage than last year.

“Most headline metrics like loan-to-value ratios and [debt service coverage] modestly deteriorated on a quarter-on-quarter basis,” wrote S&P analysts on Tuesday.

Borrowers are increasing the amount of debt secured on buildings that are being financed by conduit CMBS, the firm said.

The rating agency’s assessment of LTV ratios ...

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