Fitch Upgrades 1 Class of ASC 1997-D5

CHICAGO--(BUSINESS WIRE)--

Fitch Ratings upgrades one and affirms two classes of Asset Securitization Corporation commercial mortgage pass through certificates, series 1997-D5. A detailed list of rating actions follows at the end of this press release.

KEY RATING DRIVERS

The upgrade to class A-7 is the result of increased credit enhancement due to loan amortization and payoffs, as well as the high percentage of defeased loans (81% of the pool). Class A-7 is currently receiving principal paydown as the most senior class in the transaction.

The affirmation of class B-1 is due to sufficient credit enhancement after consideration for significant concentration as 15 loans remain, only six of which are non-defeased. Class B-2 has previously incurred realized losses.

As of the April 2013 distribution date, the pool's certificate balance has paid down 97% to $52.7 million from $1.79 billion at issuance. Classes B-1 and B-2 have outstanding interest shortfalls.

Of the remaining loans, 13 are fully amortizing (96.7%) with maturity dates in 2017 and two are ARD loans. There are no delinquent or specially serviced loans.

RATING SENSITIVITIES

No rating actions on class A-7 are expected in the future. Fitch expects a high likelihood of a full payoff of this class; however, the rating will remain at 'A' due to the potential for future interest shortfalls. If a loan transferred to the special servicer or fees increased due to outstanding litigation, the resulting increase in interest shortfalls might impact A-7. According to Fitch's global criteria for rating caps, Fitch will not assign or maintain 'AAAsf' or 'AAsf' ratings for notes that are experiencing interest shortfalls or deferrals, even if permitted under the terms of the documents (for more information please see the full report titled 'Criteria for Rating Caps in Global Structured Finance Transactions', dated Aug. 2, 2012, at www.fitchratings.com).

The rating on class B-1 is also stable due to significant concentration of the pool. Class B-2 remains at 'Dsf' due to previously incurred realized losses.

Fitch upgrades the following class:

--$7.4 million class A-7 to 'Asf' from 'BB+sf'; Outlook Stable.

Fitch affirms the following classes as indicated:

--$39.5 million class B-1 at 'Bsf'; Outlook Stable;

--$6 million class B-2 at 'Dsf'; RE 15%.

Fitch does not rate classes B-7, B-7H and A-8Z. Classes A-1A, A-1B, A-1C, A-1D, A-1E, A-2, A-3, A-4, A-5, A-6, B-3SC and interest only class A-CS1 have paid in full. Additionally, Fitch has previously withdrawn the ratings on classes B-3, B-4, B-5 and B-6 and interest only class PS-1. (For additional information, see 'Fitch Revises Practice for Rating IO & Pre-Payment Related Structured Finance Securities', dated June 23, 2010.)

Additional information on Fitch's criteria for analyzing U.S. CMBS transactions is available in the Dec. 18, 2012 report, 'U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria', which is available at 'www.fitchratings.com' under the following headers:

Structured Finance >> CMBS >> Criteria Reports

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

Applicable Criteria and Related Research:

--'Global Structured Finance Rating Criteria' (June 6, 2012);

--'U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria' (Dec. 18, 2012).

Applicable Criteria and Related Research

U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=696969

Global Structured Finance Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=679923

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=790189

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