NEW YORK CITY—A little more than a year ago, FitchRatings expressed concern over the quality of the underwriting in many of thesizable securitizations that were being announced. “Large loan CMBSdeals of late are coming to market with some average assets andaggressive assumptions,” Huxley Somerville, CMBSgroup head at the ratings agency, said at the time. “In fact, thelarge loan CMBS landscape is changing sodramatically that Fitch is questioning much of what it's seeing.”The credit enhancement, Fitch reported, was insufficient to achieveAAAsf ratings.

This year, Somerville and his team at Fitch have a new worry.Although the quality of the properties has improved, the absolutelevel of debt on large loans issued this year pose the risknow.

Specifically, the ratings agency is concernedthat ratings of 'BBB−sf' through 'Bsf' on a substantial number of2014 large loan transactions are not warranted given thesignificant amount of debt at those ratings. In a new report, Fitchsays that its wariness is “further reinforced by the amounts ofadditional debt, subordinate to the first mortgage, that raiseleverage on the property and sponsor even further.”