During the last ten years, the default rate on non-investmentgrade CMBS bonds was 0.14%, well beneath that of 3.07% fornon-investment grade corporates. The CMBS average default rate forall bonds ranged between 0.07% and 0.10%, which reflects defaultrates measured by dollars and by issuers/class, while the rate forcorporate bonds fluctuated between 1.51% and 2.41%.
"One explanation for the low CMBS default rate is thediversification that comes from multiple assets, multiple borrowingentities and multiple tenants," says Diane M. Lans, senior directorof the company. She also notes that even though some of the highestcorporate default rates were in retail outlets, supermarkets anddrug stores, which affect the real estate market, there was noimpact from these defaults on the CMBS bond defaults.
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