North American CMBS Interest in Arrears

North American commercial mortgage-backed securities (NA CMBS) structures allow for interest shortfalls. While this means there are classes of NA CMBS certificates with interest payments in arrears, DBRS Morningstar expects the cumulative or ongoing interest shortfalls to be ultimately recovered and repaid.

The Interest in Arrears designation for NA CMBS certificates rated B (low) or higher is published in a monthly commentary. The commentary includes three tables where DBRS Morningstar lists the classes of debt that are continuing to experience interest in arrears/shortfalls, classes of debt that have started to experience interest in arrears/shortfalls, and classes of debt where the interest in arrears/shortfalls has been removed or repaid.