NEW YORK--(BUSINESS WIRE)--Fitch Ratings has upgraded one and affirmed 15 classes of LB-UBS Commercial Mortgage Trust (LBUBS) commercial mortgage pass-through certificates series 2005-C5. A detailed list of rating actions follows at the end of this press release.
KEY RATING DRIVERS
The upgrade to class A-J is due to its improved credit enhancement and the expectation that the transaction will continue to delever as maturing loans repay. The affirmations reflect the sufficient credit enhancement for the balance of the classes and the overall stable performance of the underlying loans. Fitch modeled losses of 6.6% of the remaining pool; expected losses on the original pool balance total 5%, including losses already incurred. The pool has experienced $29 million (1.2% of the original pool balance) in realized losses to date. Fitch has designated 20 loans (19.7%) as Fitch Loans of Concern, which includes four specially serviced assets (8.8%).
As of the March 2014 distribution date, the pool's aggregate principal balance has been reduced by 42.8% to $1.3 billion from $2.3 billion at issuance. Per the servicer reporting, three loans (3.2% of the pool) are defeased. Interest shortfalls are currently affecting classes K through T.
The largest contributor to Fitch's modeled losses is a loan secured by a 449,443 square foot (sf), four building office complex located in Germantown, MD (5.2%). The property transferred to special servicing in January 2013 due imminent default. As of June 2013, the property was 64.1% occupied. The loan was modified with an A/B note split and is expected to be returned to the master servicer after a rehabilitation period.
The next largest contributor to Fitch's modeled losses is a loan secured by a 99,451 sf shopping center (1.1%) located in Lake in the Hills, IL. The loan transferred to the special servicer due to delinquent payments in May 2011 and subsequently became real estate owned (REO) in March 2013. The property's anchor, Dominick's (72.8% of the property net rentable area), vacated the property at the end of 2013.
The third largest contributor to Fitch's modeled losses is a loan secured by a 488-unit apartment complex (2.3%) built in 1987 and located just west of the strip in Las Vegas. Property occupancy at the property has improved to 88% over the past year after falling into the low to mid 70% range in the prior years. The loan remains current as of the most recent remittance date.
The ratings on the class A-4 through N notes are expected to be stable. The distressed classes (those rated below 'B') are expected to be subject to further downgrades as losses are realized.
Fitch has upgraded the following class as indicated:
--$187.5 million class A-J to 'AAAsf' from 'AAsf'; Outlook Stable.
Fitch has affirmed the following classes as indicated:
--$560.8 million class A-4 at 'AAAsf'; Outlook Stable;
--$105.9 million class A-1A at 'AAAsf'; Outlook Stable;
--$234.4 million class A-M at 'AAAsf'; Outlook Stable;
--$20.5 million class B at 'AAsf'; Outlook to Stable from Negative;
--$32.2 million class C at 'Asf'; Outlook to Stable from Negative;
--$29.3 million class D at 'BBBsf'; Outlook to Stable from Negative;
--$23.4 million class E at 'BBB-sf'; Outlook to Stable from Negative;
--$29.3 million class F at 'BBsf'; Outlook to Stable from Negative;
--$26.4 million class G at 'Bsf'; Outlook to Stable from Negative;
--$23.4 million class H at 'CCCsf'; RE 50%;
--$14.7 million class J at 'CCsf'; RE 0%;
--$20.5 million class K at 'Csf'; RE 0%;
--$8.8 million class L at 'Csf'; RE 0%;
--$5.9 million class M at 'Csf'; RE 0%;
--$8.8 million class N at 'Csf'; RE 0%.
The class A-1, A-2, A-3, and A-AB certificates have paid in full. Fitch does not rate the class P, Q, S and T certificates. Fitch previously withdrew the ratings on the interest-only class X-CL and X-CP certificates.
Additional information is available at 'www.fitchratings.com'.
Applicable Criteria and Related Research:
--'Global Structured Finance Rating Criteria' (May 24, 2013);
--'U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria' (Dec. 11, 2013).
Applicable Criteria and Related Research:
Global Structured Finance Rating Criteria
U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria