Delinquencies on U.S. CREL CDOs began 2013 lower, according to the latest index results from Fitch Ratings.
Following a sharp spike late last year, CREL CDO late-pays fell for a second straight month to 12.7% last month (from 13.4% in December). New delinquent assets in January consisted of only two term defaults, one matured balloon loan, and one credit impaired security.
The largest new delinquency is a term default on a B-note and mezzanine debt backed by a 410,000 sf Atlanta office building. Property cash flow declined significantly after the largest tenant (37% of NRA) vacated the property at the end of October 2012.
In January, asset managers reported approximately $50 million in realized principal losses from the disposal of several assets. The largest reported loss was a 33% realized loss on the discounted sale of a 350,000 sf REO office property located in San Diego, CA. Foreclosure occurred in December 2011, and the loss was anticipated at last rating action for the transaction.
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