Default rates on loans underlying Japanese commercial mortgage-backed securities rose to an “unprecedented high” of 53 percent in the first half, Fitch Ratings said.

Fitch has placed on negative ratings all Japanese CMBS backed by so-called bullet maturity loans as real-estate financing dries up amid a depressed outlook for the economy, the credit assessor said in a report today. Most or all the principal must be repaid when bullet maturity loans fall due.

'The agency expects the extremely challenging refinancing environment to continue,' Fitch said in today’s statement. 'The lack of finance and the resultant forced disposition of assets are weighing heavily on the real estate market.'