Fitch Upgrades 5 Classes of COMM 2004-LNB2

NEW YORK--()--Fitch Ratings has upgraded five classes and affirmed eight classes of COMM Mortgage Trust 2004-LNB2 commercial mortgage pass-through certificates. A detailed list of rating actions follows at the end of this press release.

KEY RATING DRIVERS

The upgrades reflect increasing credit enhancement as a result of pay down since the last rating action and stable projected performance. Two Fitch loans of concern (6.8% of the pool at time of last rating action) have paid off, as well as two additional loans (7.3%), and the remaining two non-defeased, non-specially serviced loans continue to perform. Fitch modeled losses of 2.9% of the original pool balance, including 2.5% in realized losses to date.

As of the July 2014 distribution date, the pool's aggregate principal balance has been reduced by 91.6% to $81.3 million from $963.8 million at issuance including $23.97 million (2.5% of the original pool balance) in realized losses to date. There are five loans remaining in the pool; two are defeased (80.2% of the pool), including the largest (75.5%) and third largest loans (4.8%); and one loan is in special servicing (3.8%). The two defeased loans mature in December 2018 and January 2019, respectively. Interest shortfalls are currently affecting classes K through P.

The specially-serviced loan is secured by a 59,933 square foot (sf) retail center located in Fort Worth, TX. The center is occupied by a mix of predominantly small local tenants with select national tenants. The loan transferred to special servicing in January 2014 due to maturity default. Occupancy and DSCR was 73% and 1.47x as of year-end (YE) 2013, respectively. The special servicer's anticipated strategy is an August 2014 foreclosure sale.

The remaining performing loans are a multifamily property in Wilmington, NC and a single-tenant Walgreens store in College Station, TX. The multifamily property is reporting a 1.56x NOI DSCR and 92.4% occupancy as of YE 2013. The loan matures in March 2019. The Walgreens asset is a fully amortizing loan with an April 2028 maturity.

RATING SENSITIVITIES

The Stable rating Outlooks on classes B through J are the result of high credit enhancement due to pay down and defeasance. Additional upgrades are not expected until there is further certainty of resolution on the specially serviced loan.

Fitch upgrades the following classes as indicated:

--$8.4 million class E to 'AAAsf' from 'AAsf'; Outlook Stable;

--$9.6 million class F to 'AAAsf' from 'Asf'; Outlook Stable;

--$10.8 million class G to 'AAAsf' from 'BBsf'; Outlook Stable;

--$10.8 million class H to 'BBsf' from 'Bsf'; Outlook Stable;

--$4.8 million class J to 'Bsf' from 'CCCsf'; Outlook Stable.

Fitch affirms the following classes as indicated:

--$487,243 class B at 'AAAsf'; Outlook Stable;

--$9.6 million class C at 'AAAsf'; Outlook Stable;

--$19.3 million class D at 'AAAsf'; Outlook Stable;

--$6 million class K at 'Csf'; RE 70%;

--$1.3 million class L at 'Dsf'; RE 0%;

--$0 class M at 'Dsf'; RE 0%;

--$0 class N at 'Dsf'; RE 0%;

--$0 class O at 'Dsf'; RE 0%.

The class A-1, A-2, A-3 and A-4 certificates have paid in full. Fitch does not rate the class P certificates. Fitch previously withdrew the ratings on the interest-only class X-1 and X-2 certificates.

Additional information on Fitch's criteria for analyzing U.S. CMBS transactions is available in the Dec. 11, 2013 report, 'U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria', 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' (May 20, 2014);

--'U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria' (Dec. 11, 2013).

Applicable Criteria and Related Research:

Global Structured Finance Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=748821

U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=724961

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=843301

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.

Contacts

Fitch Ratings, Inc.
Primary Analyst
Martin Nunnally
Associate Director
+1-212-908-0871
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Committee Chairperson
Mary MacNeill
Managing Director
+1-212-908-0785
or
Media Relations:
Sandro Scenga, New York, +1 212-908-0278
sandro.scenga@fitchratings.com

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Contacts

Fitch Ratings, Inc.
Primary Analyst
Martin Nunnally
Associate Director
+1-212-908-0871
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Committee Chairperson
Mary MacNeill
Managing Director
+1-212-908-0785
or
Media Relations:
Sandro Scenga, New York, +1 212-908-0278
sandro.scenga@fitchratings.com