2009-12-10 23:36:32 -

As new issuance in the U.S. commercial mortgage-backed securities (CMBS) sector begins to slowly re-emerge, so may a pair of issues that remain integral to the health of CMBS transactions, according to Fitch Ratings in two new reports.

The issues regarding terrorism insurance and environmental due diligence became dormant when CMBS new issuance hit a prolonged standstill beginning last year. But with a handful of TALF and non-TALF CMBS issuance coming to market, environmental due diligence and terrorism insurance remain important structural safeguards for bondholders.

'An unknown or insufficiently remediated environmental condition can have a significant impact on the value of a commercial real estate property,' according to Managing Director Bob Vrchota. As such, Fitch expects that all properties within CMBS transactions

will have environmental due diligence performed in accordance with EPA and ASTM guidelines.

Fitch continues to believe that terrorism insurance coverage remains an important component of the U.S. CMBS market, as well as a vital structural protection for bondholders. As a result, Fitch expects all loans to include coverage against terrorism attacks as part of their standard all-risk insurance policies. 'Based on its review of the coverage in place and the ongoing loan requirements for coverage, Fitch may decline to rate certain transactions with inadequate terrorism coverage,' said Vrchota.

'Environmental Site Assessments and Environmental Insurance in U.S. CMBS Transactions' and 'Terrorism Insurance and U.S. CMBS' are both available on the Fitch web site at ' www.fitchratings.com : ' under 'Latest Research, as well as under the following headers.

Sectors then Structured Finance then CMBS then Research


The preceding special reports will replace the existing criteria reports, 'Environmental Site Assessments and Environmental Insurance in U.S. CMBS Transactions,' dated April 30, 2007, and 'Terrorism Insurance and U.S. CMBS,' dated June 2, 2006.

Additional information is available at ' www.fitchratings.com : '


ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS : .

IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE ' WWW.FITCHRATINGS.COM : '.

PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE.

Fitch RatingsRyan Frank, 312-368-3133, ChicagoRobert
Vrchota, 312-368-3336, ChicagoMary MacNeill, 212-908-0785, New YorkSusan
Merrick, 212-908-0725, New YorkorMedia Relations:Sandro
Scenga, 212-908-0278, New YorkEmail: sandro.scenga@fitchratings.com : mailto:sandro.scenga@fitchratings.com