U.S. CMBS Delinquencies Tumble in July With Strong Hotel Resolutions
Fitch Ratings | August 6, 2021
Fitch Ratings-New York-06 August 2021: Fitch Ratings’ U.S. CMBS delinquency rate fell 22 bps to 3.59% in July from 3.81% in June, due to more loan resolutions, fewer new delinquencies and strong new issuance. Resolution volume was strong, totaling $1.7 billion in July, up from $1.6 billion in June. Most resolutions were hotel ($958 million) and retail ($524 million) loans. Borrowers continue to bring loans current as property cash flows improve, although some are still receiving debt relief. New delinquencies were $853 million in July, down from $1.0 billion in June. The roll rate of 30 to 60 days delinquent was 35% from June to July,...
Fitch Maintains 14 US CMBS Single Borrower Hotel Transactions on Negative Watch Due to Pandemic
Fitch Ratings | February 22, 2021
Fitch Ratings - Chicago - 22 Feb 2021: Fitch Ratings has maintained 79 classes from 14 U.S. CMBS single borrower transactions on Rating Watch Negative (RWN). Fitch originally placed the classes on RWN on March 19, 2020. KEY RATING DRIVERS The 14 transactions represent the entire portfolio of Fitch-rated single borrower hotel transactions. The transactions were issued in 2019 (four) and 2018 (10). The majority are secured by an individual hotel property; the underlying properties are located in Florida (six deals), Hawaii (four), Arizona (two) and California (one). There is one transaction secured by a portfolio of La Quinta hotels. Three tr...
Fitch: Expectations for U.S. Speculative Grade Corporates Coverage Ratios Weakened by Pandemic
Fitch Ratings | September 22, 2020
As the economy and the capital markets navigate toward a new normal, Fitch Ratings tracks how the pandemic affects its forecast fiscal 2020 performance, focusing on key liquidity benchmarks and how they evolve over time across industries and market segments. Coverage Ratios Weaken The overall forecast for median operating EBITDA/interest in Fitch’s portfolio weakened to 2.8x in mid-August from 3.2x at the end of March. Between the end of March and mid-August, expectations for median operating EBITDA/interest ratios for 2020 weakened the most for Gaming, Lodging & Leisure (GLL); Transportation; Media & Entertainment ...
Fitch Ratings Maintains the Rating Watch Negative for U.S. Single-Borrower Hotel CMBS
Fitch Ratings | September 3, 2020
"Unprecedented" Revenue Declines Prompt Continued Negative Watch for Hotel CMBS On Aug. 26, Fitch Ratings maintained the Rating Watch Negative (RWN) on all Fitch-rated U.S. CMBS single-borrower hotel transactions. Below, we outline the market and asset level factors Fitch will continue to monitor in determining ratings actions that would lead to a revision of the RWN. We also outline the anticipated timelines. There will be an unprecedented decline in hotel revenues in 2020, thus cash flow analysis utilizing 2020 numbers would be an unreliable indicator of hotel value. Fitch is forecasting that trailing twelve-month (TTM) revenue per av...
Fitch Ratings: New Single-Borrower Hotel CMBS Ratings Unlikely Due to Sector Performance
Fitch Ratings | August 6, 2020
Significant hotel sector performance deterioration as a result of the coronavirus pandemic and recession make the assignment of ratings to new US commercial mortgage-backed securities (CMBS) single-asset single-borrower (SASB) hotel transactions unlikely at this time, Fitch Ratings says. The duration of the pandemic is uncertain, which limits the visibility of short-term performance and precludes the assignment of Stable Outlooks. Fitch discusses hotel sector pressures in its latest report New Ratings Unlikely for U.S. Single-Borrower Hotel CMBS due to Coronavirus-Related Volatility. A sustainable recovery in the lodging sector depends on...
Fitch Revises North American CMBS Hotel Outlook to Negative; Coronavirus Adds to Expected Decline
Fitch Ratings | March 13, 2020
Fitch Ratings has revised its North American CMBS hotel asset performance outlook to negative from stable/negative. The negative outlook revision for the sector is due to several factors including new supply and weakening economic conditions. Fitch expects RevPAR growth to flatten out in 2020 and then decrease by a low single digit percent in 2021. The impact from the coronavirus will exacerbate hotel cash flow declines and rising expenses from wages and real estate taxes may exceed revenue growth. Hotels will be the first property type to be affected by the coronavirus due to reduced tourism and travel, and a slowdown in economic activ...
U.S. Lodging Fundamentals Portend Improved RevPAR Growth
Fitch | May 16, 2018
Fitch Ratings-New York/Chicago-16 May 2018: U.S. lodging RevPAR growth will be in the 2% - 4% range in 2018, according to Fitch Ratings. The agency raised its prior outlook of 0% - 2% growth due to better than expected corporate transient lodging demand in the context of continued, strong leisure demand and moderate industry supply growth. Higher-end resort hotels will outperform but elevated supply in key markets such as New York City will weigh on urban and upscale hotels. The sector credit outlook is stable, with most issuers reporting healthy operating fundamentals and managing leverage within stated financial policy targets. U.S. l...
Fitch: Hotel Oversupply Raising US CMBS Loan Concern
Fitch Ratings | January 30, 2018
Early warning signs of declining hotel performance have emerged, says Fitch Ratings. Fitch has seen an increase in the volume of hotel loans transferring to special servicing and performance metrics in seven of the top US metropolitan markets are under pressure by oversupply. However, we expect revenues across the broader US market to grow through the end of 2018, albeit slowly, and the impact on CMBS to be limited this year. Fitch began to observe signs that the US hotel market was peaking in 2014. In the second half of that year, we began to cap revenue per available room (RevPAR) in our ratings analysis to address cash flow sustainab...
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