...Expect More Stable Ratings: Back-testing Fitch Ratings' proposed EMEA CMBS rating criteria suggests ratings will be much more stable over future market cycles than over the past one. The economic recession led to major downgrades as property markets collapsed, and serves as a backdrop to Fitch's efforts to instil appropriate counter-cyclicality in its analysis. Cycle and Quality Drive Outcomes: The study suggests that key drivers of EMEA CMBS credit risk are appropriately screened for using Fitch's proposed criteria: CMBS that performed well through the recession would have been rated considerably more highly at closing than those that eventually suffered losses. Fitch's ratings are based on a wide variety of factors that correlate with the point-in-cycle and collateral quality, neither of which is captured in commonly- quoted loan-to-value and debt service coverage ratios. No Loss Above Implied `BB+': The findings suggest that for the sample of deals tested, had Fitch's proposed EMEA CMBS...
