OREANDA-NEWS. Fitch Ratings said in a new report that a limited number of loans maturing in 2015 is the main reason behind the stable performance of the Fitch-rated EMEA CMBS portfolio so far this year. The percentage of loans in default (44.4%) and post maturity (63.7%) increased marginally in 2Q15 while the proportion of loans in special servicing (42.3%) fell slightly.

The maturity repayment index improved to 68.3% in 2Q15 from 67.5% in 1Q15. This was mainly driven by the repayment of Forest Finance, DD Karstadt Hilden (DECO 14) and Ranstadt (EPC 3). The latter two had been in special servicing and repaid with losses.

Five loans were scheduled to mature in 3Q15, compared with three in the last quarter and in contrast to an average of 28 per quarter in 2013 and 2014. One of the maturing loans (Mapeley in DECO 6) has been in special servicing since 2011, and assets are being liquidated. Completion is expected at or after\loan maturity. Two loans, the underlying facility in the Vesteda Residential Funding II transaction and Criterion in Indus (Eclipse), have since repaid in full.

Another of the five maturing loans (Tishman in Vulcan (ELoC28)) was restructured and extended after its original maturity in July 2014. A further extension is being negotiated, to grant the borrower more time to sell the remaining asset. However, Fitch believes that a non-repayment of I/S Scandinavian Property Investment loan (DECO UK Conduit-1) would result in enforcement and ultimate moderate losses, as less than two years remain until bond maturity.

Once the bulk of legacy loans have repaid (with or without losses), the Fitch-rated EMEA CMBS portfolio will predominantly consist of long-dated transactions and recent issuance. The long-dated are mostly UK transactions, heavily or fully amortising over term and either credit-linked to their sole tenants or secured on multi-let prime assets (shopping centres or offices). The recent issuance were structured to avoid the weaknesses witnessed in CMBS 1.0 and are subject to tighter lending criteria, comparable to the performing pre-2006 vintages.