Europe Commercial Mortgage Defaults Are Increasing `Steadily,' Fitch Says

Defaults on European commercial mortgages packaged into bonds increased “steadily” in the second quarter, Fitch Ratings said.

A total 22 loans were in default at the end of June, compared with 12 in the previous three months, Fitch said in a report today.

“While the reasons for default are varied, an increasing proportion relates to problems at loan maturity,” Fitch analysts Gioia Dominedo and Andrew Currie said. “Upcoming maturities continue to be Fitch Ratings’ main concern.”

Borrowers of commercial mortgages are struggling to refinance because most loans are linked to second-line office, retail and industrial properties where prices haven’t recovered and banks aren’t prepared to lend, according to Fitch.

To contact the reporter on this story: Esteban Duarte in Madrid at eduarterubia@bloomberg.net

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