Soaring CMBS delinquencies a preview of pain ahead

US office buildings_PA_575x375
By Max Adams
28 May 2020

Loans packaged into US commercial mortgage-backed securities (CMBS) delinquent by 30 days or more have quadrupled, according to remittance reports published in May, as the economic devastation of the coronavirus pandemic ripples through the financial system. Market participants fear record levels of distress if borrowers that are now in their grace periods add to the figures in the coming month, writes Max Adams.

May’s remittance reports painted a grim picture of the state of borrowers backing CMBS deals. The percentage of loans that are 30 days or more behind on payments went from 1.3% in April to 5.6% this month, according to Bank of America analysts.

Loans on hospitality and retail properties ...

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