Fitch Ratings Affirms LB-UBS Commercial Mortgage Trust 2003-C1

NEW YORK--(BUSINESS WIRE)--Fitch Ratings affirms, assigns Loss Severity (LS) ratings and Outlooks to LB-UBS Commercial Mortgage Trust commercial mortgage pass-through certificates, series 2003-C1 as follows:

--$72.9 million class A-3 at 'AAA/LS1'; Outlook Stable;

--$537.5 million class A-4 at 'AAA/LS1'; Outlook Stable;

--$97.3 million class A-1B at 'AAA/LS1'; Outlook Stable;

--Interest-only (I/O) classes X-CL and X-CP at 'AAA';

--$25.7 million class B at 'AAA/LS1'; Outlook Stable;

--$25.7 million class C at 'AAA/LS1'; Outlook Stable;

--$20.6 million class D at 'AAA/LS1'; Outlook Stable;

--$18.9 million class E at 'AAA/LS1'; Outlook Stable;

--$17.1 million class F to 'AAA/LS1'; Outlook Stable;

--$18.9 million class G to 'AAA/LS3'; Outlook Stable;

--$18.9 million class H to 'AA/LS3'; Outlook Stable;

--$12 million class J to 'A/LS3'; Outlook Stable;

--$10.3 million class K to 'A-/LS3'; Outlook Stable;

--$18.9 million class L to 'BBB/LS3'; Outlook Stable;

--$6.9 million class M to 'BBB-/LS4'; Outlook Stable;

--$6.9 million class N to 'BB/LS4'; Outlook Stable;

--$10.3 million class P at 'B+/LS5'; Outlook Negative;

--$5.1 million class Q at 'B/LS5'; Outlook Negative;

--$5.1 million class S at 'B-/LS5'; Outlook Negative.

Classes A-1 and A-2 have been paid in full. Fitch does not rate the $7.0 million class T.

Affirmations are due to the pool's stable performance and minimal future expected losses following Fitch's prospective review of potential stresses to the transaction. Fitch expects 0.8% or $7.3 million, of losses associated with loans currently in special servicing and loans that cannot refinance at maturity based on Fitch's refinance test. As of the March 2010 distribution date, the pool's certificate balance has paid down 31.8% to $935.9 million from $1.4 billion at issuance.

There are 93 of the original 114 loans remaining in transaction, 16 of which have defeased (28.2% of the current transaction balance). There are five specially serviced loans of which, one is real estate owned, two are in foreclosure, and two are recent maturity defaults. Fitch expects losses from loans currently in special servicing to be absorbed by the unrated class M.

Fitch stressed the cash flow of the remaining non defeased loans by applying a 10% reduction to 2008 fiscal year end net operating income and applying an adjusted market cap rate between 7.25% and 10% to determine value.

Similar to Fitch's prospective analysis of recent vintage CMBS, each loan also underwent a refinance test by applying an 8% interest rate and 30-year amortization schedule based on the stressed cash flow. Loans that could refinance to a debt service coverage ratio of 1.25 times or higher were considered to payoff at maturity. Seventeen loans did not payoff at maturity and one loan incurred a minimal loss when compared to Fitch's stressed value.

Additional information on Fitch's amended criteria for analyzing recent vintage U.S. CMBS is available in the July 7, 2009 report, 'Surveillance Methodology for Recent Vintage U.S. CMBS,' which is available at 'www.fitchratings.com' under the following headers:

Structured Finance then CMBS then Criteria Reports

Additional information is available at www.fitchratings.com.

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