€37.4bn of securitised loans falling due in next two years

2012 sees record €13bn of maturities, inflating mountain of problem loans

A record €37.4bn of securitised European loans fall due this year and next, according to Standard & Poor’s.

Some 147 loans totalling €13.16bn are set to mature in 2012, with an even higher spike in 2013, of €24.23bn. This month alone, 43 loans with a balance of €3.11bn mature – the highest monthly volume since the onset of the credit crunch.

Fitch’s figures are slightly lower, but not much. The rating agency tracks €10.7bn of outstanding debt in 116 loans maturing in 2012, “a vast increase on the €3.8bn that came due in 2011”.

At the same time, borrowers have been able to repay only a fraction of the debt falling due. In its December European CMBS Loan Maturity Bulletin, Fitch said: “Only 27.1% of loans have been repaid at maturity, with the majority extended (42.1%) and a further 26.4% either being worked out or in standstill.”

With bank finance severely constrained and average loan-to-value ratios of 98% for the loans maturing this year, Fitch says “most of the 2012 loan maturities will not result in timely principal redemption”, inflating the steadily growing number of deals in standstill, restructuring or workout.

“Over time, smaller loans backed by higher-quality properties have been repaid with greater frequency, reducing the average credit quality of the remaining CMBS portfolio.”

The largest properties in UK deals maturing this month are: CAA House on Kingsway in Holborn, in Windermere X1; Starwood Hotel Group’s Meridien Hotel on Piccadily, which is in DECO 8 – UK conduit 2; and Victoria Square House in Birmingham in EPIC (Culzean).