Fitch to Rate Oaktree Real Estate Investments/Sabal, Series 2012-LV1; Presale Issued

CHICAGO--(BUSINESS WIRE)--Fitch Ratings has issued a nonperforming loan (NPL) presale report on Oaktree Real Estate Investments/Sabal's ORES NPL, series 2012-LV1 notes. Fitch expects to rate the transaction as follows:

--$195,000,000 notes 'BBB-sf'; Outlook Stable.

The expected ratings are based on information provided by the issuers as of Sept. 6, 2012.

The notes are secured by all of the assets of the issuers, which include 615 performing and nonperforming real estate secured loans, 22 non-real estate secured loans, 49 unsecured loans, and 78 REO properties acquired at acquisition or through foreclosure. The collateral also includes ownership interests in the special-purpose vehicles holding the REO properties, the grantor trust certificate, rights under the mortgage documents, all accounts, and any and all proceeds and the rights to receive payments thereunder.

Unlike traditional CMBS transactions, all collections are aggregated and applied to a single waterfall, and no proceeds will be distributed to the equity holders until the notes have been paid in full.

Fitch sampled 62.3% of the transaction collateral, including site inspections on 46.4% of the pool.

Fitch's stressed recovery estimates are sufficient to repay the notes of $195,000,000 in full, based on stressed modeling assumptions, in a 'BBB-sf' stress. The notes represent an advance rate of 65% to the issuers' basis, 44.1% of the issuers' expected recovery amount, and 58.3% of Fitch's base case recovery estimates.

The asset manager will be Sabal Financial Group, LP. Although Fitch has not yet completed a formal servicer review, Fitch has found the asset manager to be acceptable for this transaction based on its initial review. The cash management servicer will be Berkadia Commercial Mortgage, LLC, which is rated 'CMS2' as a master servicer and 'CPS1-' as primary servicer.

The presale report is available at 'www.fitchratings.com'.

Additional information is available at 'www.fitchratings.com'. The ratings above were solicited by, or on behalf of, the issuer, and therefore, Fitch has been compensated for the provision of the ratings.

Applicable Criteria and Related Research:

--'Global Rating Criteria for Non-Performing Loan Securitisations', Feb. 3, 2012;

--'Counterparty Criteria for Structured Finance Transactions', May 30, 2012;

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

--'Criteria for Rating Caps in Global Structured Finance Transactions', Aug. 2, 2012;

--'U.S. Commercial Mortgage Servicer Rating Criteria', Feb. 18, 2011.

Applicable Criteria and Related Research: Oaktree Real Estate Investments/Sabal, Series 2012-LV1 (US CMBS)

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=688358

Global Rating Criteria for Non-Performing Loan Securitisations

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=664889

Counterparty Criteria for Structured Finance Transactions

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=678938

Global Structured Finance Rating Criteria

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

Criteria for Rating Caps in Global Structured Finance Transactions

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=684737

U.S. Commercial Mortgage Servicer Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=584005

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