Fitch: workouts jump 37%

Loan workouts have become more prevalent as the majority of loans that were due to mature in January remaining outstanding, according to Fitch.

The ratings agency said the total number of securitised loans it monitors being worked out due to maturity default increased by 37% during the past month, from 40 to 55.

In the UK this included the £93m CAA House, which formed part of the Windermere XI CMBS, and has resulted in the Midtown building being put up for sale.

The majority of the other 15 loans were German.

Repayments remained broadly unchanged, with nine loans repaid in full during the month.

One of these was the £262m Milton & Shore Houses loan, which was repaid after Beacon Capital completed a £350m sale of the building to Malaysian investment fund PNB.

Fitch said that just three loans that were originally scheduled to mature in January were granted extensions by servicers. This includes the £32m loan to Host Hotels & Resorts secured on Le Meridien Piccadilly, which was granted the second of three one-year extensions.

It said that different patterns were emerging between the maturity outcomes of German and UK loans, with 60% of German loans extended compared with just 21% in the UK.

The higher proportion of loan extensions in Germany reflects the higher costs of enforcement: not only are foreclosure costs higher, but the stigma associated with workouts suggests that recoveries from forced sales are likely to be lower.

After a bumper January, when €2.6bn (£2.2bn) of debt was scheduled to mature, February is set to be quiet month with just three maturities in France, Germany and the Netherlands respectively.