CHICAGO--()--Fitch Ratings has affirmed Banc of America Large Loan, Inc. commercial mortgage pass-through certificates, series 2006-BIX1. A detailed list of rating actions follows at the end of this press release.
KEY RATING DRIVERS
The affirmations are the result of sufficient credit enhancement in light of the transaction's significant concentration. Two of the original 16 loans remain. One loan continues to perform according to its modified terms, and one asset is real estate owned (REO).
The Rating Outlook of class K has been revised to Negative from Stable to reflect the possibility of a future downgrade if expected or incurred losses on the REO Ballantyne Village are higher than currently anticipated.
The ratings of classes G through J are stable and expected to be affirmed in any future rating action. Fitch believes full principal recovery on these classes is likely; however, upgrades are not warranted due to potential future interest shortfalls as well as uncertainty surrounding the final resolution of the remaining assets.
The transaction's largest loan, a portion of the CarrAmerica National Pool (63.5%), continues to perform according its modified terms. The loan was originally secured by fee, leasehold, and cash flow interests in a portfolio of 73 office properties located throughout the U.S. Following releases of collateral, the portfolio currently consists of 13 properties totaling approximately 4 million square feet (sf).
The loan transferred to special servicing in February 2011 for imminent maturity default, with the borrower seeking an extension. The loan was modified with terms that include an extension to August 2013, $40 million in paydown to the A notes, additional paydown after the release of one property, scheduled amortization during the extended maturity period, additional paydown with continued property releases and all fees paid by the borrower. The servicer reported overall occupancy as of year-end 2012 was 91.9%. Due to the significant delivering of the loan since issuance, a full payoff of the loan is likely.
The Ballantyne Village is a 166,041 sf REO retail center located in Charlotte, NC, approximately 14 miles south of downtown Charlotte, in the neighborhood known as Ballantyne. The property was built in 2005 and the subject loan refinanced a construction loan. The collateral does not include a 480-space parking deck; however, an easement agreement provides access and use of the parking deck.
The loan transferred to special servicing in July 2009 due to imminent default. The special servicer and the borrower completed negotiations and executed a forbearance agreement in March 2011. The agreement included several conditions, one of which was the full payoff of the loan by October 2012 or the loan would be foreclosed via deed-in-lieu of foreclosure. The borrower did not repay the loan and it became REO as of November 2012. The special servicer has engaged management and brokerage firms, and the property is listed for sale.
Fitch affirms the ratings and revises the Outlooks of the following pooled certificates as indicated:
--$9.5 million class G at 'Asf'; Outlook Stable;
--$28.3 million class H at 'A-sf'; Outlook Stable;
--$11.3 million class J at 'BBBsf' Outlook Stable;
--$11.8 million class K at 'Bsf'; Outlook revised to Negative from Stable.
Fitch affirms the rating and Recovery Estimate (RE) of following pooled certificate:
--$18.9 million class L at 'Dsf'; RE 0%.
Fitch affirms the ratings and Outlooks the following nonpooled certificates:
--$4 million class J-CP at 'BBB+sf'; Outlook Stable;
--$5.9 million class K-CP at 'BBBsf'; Outlook Stable;
--$11.5 million class L-CP at 'BBB-sf'; Outlook Stable.
Classes X-1B, X-2, X-3, X-4 and X-5 were previously withdrawn. Classes A-1 through F, X-1A, J-CA, K-CA, L-CA, M-MC and L-SC have paid in full.
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 Structured Finance Rating Criteria' (June 6, 2012);
--'Criteria for Analyzing Large Loans in U.S. Commercial Mortgage Transactions' (Sept. 21, 2012).
Applicable Criteria and Related Research
Global Structured Finance Rating Criteria
Criteria for Analyzing Large Loans in U.S. Commercial Mortgage Transactions