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Late-pays on commercial real estate loan collateralized debt obligations delinquencies (CREL CDOs) increased to 13.1% in February from 12.7% in January, according to new data from Fitch Ratings. However, the total dollar balance of delinquent assets rose only minimally.

Fitch Ratings reports that since January, the total collateral balance has decreased by approximately $350 million (2.3%). Fitch Ratings expects the total collateral balance to decline further as asset managers continue to resolve loans and pay down the transaction liabilities. 

Only five new delinquencies were reported in February, totaling $31 million. Among them were three matured balloons, one term default and a newly credit-impaired security. The largest new delinquency was a whole loan secured by a hotel located proximate to Rhode Island's T.F. Green International Airport, which matured in the reporting period without repayment.

In February, asset managers reported only $7.4 million in realized principal losses from the disposal of three assets. The largest reported loss was a 17% realized loss on the discounted payoff (DPO) of a defaulted whole loan secured by a portfolio of office properties located in San Antonio. Continued litigation prevented the asset manager from foreclosing on the property, and a DPO was negotiated.

A total of 28 Fitch-rated CREL CDOs reported delinquencies ranging from 0.3% to 66.4% last month. In total, 41% of Fitch-rated CREL CDOs were failing at least one overcollateralization test in February.


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