Maturity Wall Looms Anew for CMBS

S&P headquarters in Lower Manhattan

NEW YORK CITY—The question of how, or if, borrowers will be able to refinance the nearly $120 billion in CMBS loans maturing through 2018 is on the minds of market participants, including the ratings agencies. S&P Global Ratings said Friday that some $12 billion of the $92 billion of loans maturing during 2017 alone could default and end up in special servicing. Projections of lower deal volume next year and the new risk-retention rule, which takes effect on Dec. 24, could pose further challenges.

“Our CMBS surveillance group has reported that $119 billion of CMBS conduit/fusion loans will mature between the fourth quarter of 2016 and ‘18,” says S&P credit analyst Steven Altman. “With an anticipated 13% default rate on the $92 billion of 2007 maturities alone, an additional $12 billion of 2007 loan maturities may end up transferring to special servicing. Applying the same 13% default rate to the entire $119 billion would lead to more than $15 billion of aggregate loan transfers to special servicers.”