European commercial mortgage bonds still under water

[LONDON] A record amount of commercial real estate loans funding office blocks and shopping malls from Dusseldorf to Milan are in the hands of administrators after they were not repaid on time.

Almost 18 billion euros (S$30 billion) of loans packaged into commercial mortgage-backed securities graded by Moody's Investors Service are being managed by special servicers, 25 per cent of deals rated by the company.

Delinquent loans at Standard & Poor's total an all-time high of 15 billion euros, and a record 11 billion euros at Fitch Ratings.