Defeasance among loans in U.S. commercial mortgage-backed securities surged in 2010 to 2.8 billion, up from $1.3 billion the preceding year, according to Moody’s Investors Service. “Defeasance remains an important factor in CMBS credit because it dramatically reduces the risk of potential loss of principal and interest associated with real estate assets by substituting Aaa-rated U.S. government securities for the real estate collateral," according to Sandra Ruffin, a v.p. and senior credit officer at Moody's.

Click here to read the release from Moody’s.