Fitch Estimates Store Closure Exposures in CMBS


Fitch said Thursday it sees little risk of a negative rating impact on CMBS from the closure of 100 to 120 unspecified Sears and Kmart stores across the U.S., but noted there is some exposure in the commercial mortgage-backed securities universe to the concern.

The rating agency said it identified 255 Fitch-rated loans with a Sears or Kmart entity listed as a tenant. The total value of these loans is $7.74 billion. Of those loans, 27 are single-tenant facilities secured by a Sears or Kmart. Those loans total $156.8 million.

The majority of these single-asset loans are in diversified transactions issued between 2005 and 2008. The portfolio concentrations of these loans range from less than one percent to 9.11%.

The highest single tenant concentration is secured by a stand-alone Kmart property located in the Kahului section of Maui, HI. The property secures a $5.26 million loan in the Mortgage Capital Funding Inc. 1998-MC2 transaction. Fitch said it believes that this transaction has sufficient credit support in the class rated ‘B+’ to absorb a total loss of the loan without impacting investment-grade ratings.

Fitch said it would continue to monitor the developments concerning Sears Holdings.

Daily Briefing | Thursday, December 29, 2011

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