Loan resolutions exceeded new U.S. commercial real estate loan collateralized debt obligations (CREL CDOs) delinquencies last month, resulting in a decline in overall late-pays, according to the latest index results from Fitch Ratings.
Fitch Ratings reports that U.S. CREL CDO delinquencies fell to 13% last month from 13.9% in April. Driving the decline was an extension of the Kerzner International Portfolio loan. A modification and extension through 2014 of the Kerzner loan was completed last month.
New delinquent assets in May consisted of five matured balloon loan interests, including three hotel loan interests. Offsetting these new delinquencies were 14 assets that were removed from the index last month.
CREL CDO asset managers reported approximately $44 million in realized losses in May. The largest loss, totaling $14.2 million, was related to the write-off of a B-note secured by land in Orlando, Fla.; the loan had been delinquent since its maturity date in early 2010, and a recent appraisal valued the property well below the B-note amount.