Dominion Bond Rating Service anticipates another strong year for U.S. and Canadian commercial mortgage-backed securities (CMBS) markets in 2005 following a solid 2004.

“As competition among U.S. lenders increased in 2004, so did the originations of interest-only and partial interest-only loans. In addition, new structures have entered the market,” DBRS analyst Erin Stafford said. DBRS report issued a report on CMB markets today.

In the 2005 Canadian market, DBRS envisions CMBS capturing a larger share of the commercial mortgage market, higher CMBS issuance volumes, and the adoption and acceptance of innovative structures.

There may also be more upgrades in the Canadian CMBS market as some earlier CMBS transactions have seasoned and continue to experience amortization and improved performance.

In 2005, DBRS will be launching a new tool using MortgageRamp that will enhance transparency into the rating process. DBRS plans to make the tool available to investors later this year.