S&P sees US$12b of loans defaulting in 2017

New York

THERE'LL be no holiday cheer for commercial property developers after S&P Global Ratings said about US$12 billion of loans were headed for default in 2017.

That's because many of the US$92 billion of loans that S&P says are slated to mature next year were written in the run-up to the financial crisis, when lending standards plummeted. Delinquencies have already risen to almost 7 per cent as these loans start to come due, and as the overall universe of commercial mortgages shrinks, analysts led by Steven Altman wrote in the report. That rate still remains below 2012 levels, when it reached 9.8 per cent.