Fitch Affirms COMM Mortgage Trust 2005-FL10

Business Wire

CHICAGO--(BUSINESS WIRE)--

Fitch Ratings has affirmed four classes of COMM Mortgage Trust 2005-FL10. A detailed list of rating actions follows at the end of this release.

KEY RATING DRIVERS

As of the September 2013 remittance, the pool has paid down by 98% since issuance, with only one loan remaining.

The affirmations of the distressed ratings are due to continued high credit risk associated with the remaining loan. The remaining loan, Berkshire Mall (100%), is secured by 589,146 square feet (sf) of a 715,146-sf regional mall located in Lanesboro, MA, about 40 miles east of Albany, NY. The collateral consists of 192,793 sf of in-line space and 396,353 sf of anchor/major tenant space. The non-collateral anchor space (Target) totals approximately 126,000 sf. The property has suffered from a tertiary location and weak in-line / junior anchor occupancy.

As of June 2013, the mall was 79% occupied with servicer-reported DSCR of 1.86x. The borrower has recently extended the terms of several anchor tenants on a short-term basis; however, the property continues to face rollover risk as 17% of leases are expected to expire in 2014.

In March 2012, a two-year forbearance through March 2014 was executed after the borrower was unable to refinance the loan at its extended maturity. Per the forbearance agreement, the borrower contributed $250,000 in new equity to a rollover reserve. In addition, the loan is subject to hard cash management requiring excess cash flow be applied to an excess cash flow reserve (up to $300,000), then to a rollover reserve (up to $4 million), and then to amortize the loan. As of Sept. 25, 2013, the loan had approximately $3.7 million in total reserves. After being in special servicing since February 2010, the loan was returned to the master servicer in September 2012 and was current as of the most recent remittance.

RATING SENSITIVITIES

The ratings of the remaining distressed classes (those rated below 'Bsf') are subject to further downgrades as losses are realized. Fitch anticipates significant losses based on current valuations of the asset and uncertainty related to the refinance of the loan.

Fitch has affirmed the following classes and revises the Recovery Estimates (RE) as indicated:

--$6.4 million class J at 'CCCsf'; RE 100%;

--$19.8 million class K at 'Csf'; RE 75%;

--$6.5 million class L at 'Csf'; RE 0%;

--$4.3 million class M at 'Dsf'; RE 0%.

The following classes originally rated by Fitch have paid in full: A-1, A-J1, A-J2, X-1, MOAX-1, MOAX-2, MOAX-3, B, C, D, E, F, MOA-1, MOA-2, N-PC, O-PC, P-PC, Q-PC, N-DEL and O-DEL.

Fitch does not rate the class A-J3, G, H and MOA-3 certificates.

In addition, Fitch previously withdrew the ratings on the interest-only classes X-2-DB, X-2-NOM, X-2-SG, X-3-DB, X-3-NOM and X-3-SG.

Additional information is available at 'www.fitchratings.com'.

Applicable Criteria and Related Research:

--'Global Structured Finance Rating Criteria' (May 24, 2013);

--'Surveillance Criteria for U.S. CREL CDOs and CMBS Large Loan Floating-Rate Transactions' (Nov. 29, 2012);

--'Criteria for Analyzing Large Loans in U.S. Commercial Mortgage Transactions' (Sept.20, 2013).

Applicable Criteria and Related Research:

Global Structured Finance Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=708661

Surveillance Criteria for U.S. CREL CDOs and CMBS Large Loan Floating-Rate Transactions

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=695733

Criteria for Analyzing Large Loans in U.S. Commercial Mortgage Transactions -- Effective Sept. 27, 2010 to Sept. 26, 2011

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=560805

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=804180

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.

Contact:
Fitch Ratings
Primary Analyst
David Ro, +1 312-368-3132
Associate Director
Fitch Ratings, Inc.
70 West Madison
Chicago, IL 60602
or
Committee Chairperson
Mary MacNeill, +1 212-908-0785
Managing Director
or
Media Relations:
Sandro Scenga, +1 212-908-0278
sandro.scenga@fitchratings.com

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