Fitch, Moody's mull further rating cuts on European CMBS

Fitch Ratings echoed peer credit rating agency Moody's on Thursday to warn of a risk of further deterioration in the market for commercial real estate-backed debt, the Financial Times reported. Fitch Ratings said that deteriorating loan credit quality is creating downward pressure on ratings and highlighted uncertainty over whether loans could be refinanced when they matured. About 41% of all Fitch's publicly-rated European CMBS tranches - bonds secured against pools of commercial real estate mortgages - are at risk of potential rating cuts.

Moody's noted last week that the performance of a number of CMBS deals in Europe, the Middle East and Africa had deteriorated in the last quarter of 2008, with further deterioration expected for the coming months.