Fitch Affirms ASC 1997-D5

CHICAGO--(BUSINESS WIRE)--Fitch Ratings affirms eight 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.

The affirmations are due to sufficient credit enhancement after consideration for both defeased loans and expected losses from the specially serviced loan. As of the June 2011 distribution date, the pool's certificate balance has paid down 79.7% to $363 million from $1.79 billion at issuance.

Fitch modeled losses of 1.4% of the remaining pool; expected losses based on the original pool are 6.2%, reflecting losses already incurred to date. Fitch expects the losses associated with the specially serviced loans to be absorbed by class B-2.

There are 44 remaining loans from the original 155 loans at issuance. Of the remaining loans, 14 loans (28.4%) have defeased. Additionally, 15 loans (18.1%) are fully amortizing and 23 loans (80.9%) are ARD loans.

The Bellaire loan is currently the only loan (0.60%) in special servicing. The loan is secured by an 85 unit independent senior living apartment building located in Riverview, MI. The property sustained significant fire damage in late 2008 and has been undergoing restoration and renovation of the property. The insurance payment for damages has been received and will be used to fund improvement costs along with bringing debt service payments current.

Fitch stressed the cash flow of the non-defeased loans by applying a 5% reduction to the most recent year-end net operating income and applying an adjusted market cap rate to determine value.

Fitch affirms the following classes as indicated:

--$45.4 million class A-1E at 'AAAsf/LS1'; Outlook Stable;

--$87.7 million class A-2 at 'AAAsf/LS3'; Outlook Stable;

--$52.6 million class A-3 at 'AAAsf/LS3'; Outlook Stable;

--$26.3 million class A-4 at 'AAAsf/LS3'; Outlook Stable;

--$39.5 million class A-5 at 'AAsf/LS3'; Outlook Stable;

--$43.9 million class A-6 at 'BBB+sf/LS3'; Outlook Stable;

--$21.9 million class A-7 at 'BB+sf/LS3'; Outlook to Stable from Negative;

--$39.5 million class B-1 at 'Bsf/LS3'; Outlook Negative.

Fitch does not rate classes B-7, B-7H and A-8Z. Classes A-1A, A-1B, A-1C, A-1D and interest only class A-CS1 have paid in full. Fitch maintains the rating of 'Dsf/RR5' on Class B-2. Additionally, Fitch has withdrawn the rating of classes B-3, B-4, B-5 and B-6. Fitch also has withdrawn the rating of the interest only class PS-1 (for additional information, see 'Fitch Revises Practice for Rating IO & Pre-Payment Related Structured Finance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 amended criteria for analyzing U.S. fixed rate CMBS is available in the Nov. 15, 2010 report, 'Surveillance Methodology for U.S. Fixed Rate CMBS Transactions,' 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' (Aug. 13, 2010);

--'Special-Purpose Vehicles in Structured Finance Transactions' (Sept. 17, 2009);

--'Surveillance Methodology for U.S. Fixed Rate CMBS Transactions' (Nov. 15, 2010);

--'Rating Criteria for Fitch's U.S. CMBS Multiborrower Rating Model' (Jan. 4, 2008).

Applicable Criteria and Related Research:

Global Structured Finance Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=547326

Criteria for Special-Purpose Vehicles in Structured Finance Transactions

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=635249

Surveillance Methodology for U.S. Fixed-Rate CMBS Transactions

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=574208

Rating Criteria for Fitch's U.S. CMBS Multiborrower Rating Model

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=367170

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