Improving employment is expected to reduce CMBS defaults

03/1/2012 | CoStar Group

The improving employment picture is good news for commercial mortgage-backed securities, Moody's Investors Service says, adding that loss estimates for seasoned transactions may have peaked. "The 2016 and 2017 vintages of U.S. CMBS are still expected to see elevated levels of maturity defaults given the high degree of leverage employed in 2006-07 and the subsequent property value decline," said Tad Philipp, Moody's director of commercial real estate research. "However, the improving employment picture will help lead to fewer maturity defaults and lower losses on the loans that do default."

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