CHICAGO--(BUSINESS WIRE)--Fitch Ratings has affirmed four classes of Bank of America, N.A. - First Union National Bank Commercial Mortgage Trust's (BofA-FUNB) commercial mortgage pass-through certificates series 2001-3. A detailed list of rating actions follows at the end of this release.
KEY RATING DRIVERS
The affirmation of class M reflects sufficient credit enhancement, due to a sizable subordinate class, and the stable performance of the two remaining loans. Class M is currently the most senior class and will continue to receive principal paydown. The remaining classes are affirmed at 'Dsf' due to experienced losses.
As of the November 2016 distribution date, the pool's aggregate principal balance has been reduced by 98.9% to $12.3 million from $1.14 billion at issuance. The pool has realized $45.5 million (4% of the original pool balance) in losses to date. Interest shortfalls are currently affecting classes N through Q.
Pool Concentration: The pool is concentrated with only two remaining loans.
Remaining Collateral: The largest loan in the pool (69.1% of the pool) is secured by a 98,344-square foot (sf) retail property located in Las Vegas, NV. The property is roughly two miles from the Las Vegas Strip and is shadow-anchored by Smith's, grocery store chain with 132 locations. The loan transferred to the special servicer in August 2011 due to a balloon payment default. However, after receiving a maturity date extension through November 2022, the loan was returned to the master servicer in August 2013 and has remained current. National tenants at the center include Chase Bank (ground lease), Jack in the Box and Supercuts, but the majority of the tenants are local. Occupancy has been stable for the past several years and was reported to be 91% as of June 2016. The debt service coverage ratio (DSCR) was reported to be 1.70x at year-end (YE) 2015.
The second remaining loan (30.9%) is secured by a 89,589-sf retail property located in Menasha, WI, which is approximately 35 miles southwest of Green Bay. This loan also received a maturity date extension after transferring to the special servicer in February 2011 for maturity default. As a result of the loan modification, the maturity date was extended to December 2018 and the loan was returned to the master servicer in January 2014. Gold's Gym (42% of net rentable area) occupies the anchor space, which was formerly leased to a grocery store. The property is shadow-anchored by ShopKo and features other national tenants including TCF Bank, Edward Jones and National Cash Advance. Occupancy at the property has been historically low with the average occupancy being 63% since 2008. As of June 2016, the occupancy and DSCR was reported to be 61% and 1.39x, respectively.
The Rating Outlook on class M remains Stable due to the class seniority and continued paydown. Any losses to the remaining loans should be absorbed by the subordinate N class. Given the pool concentration, upgrades to class M are unlikely.
DUE DILIGENCE USAGE
No third party due diligence was provided or reviewed in relation to this rating action.
Fitch affirms the following classes:
--$3.8 million class M at 'Bsf'; Outlook Stable;
--$8.5 million class N at 'Dsf'; RE 50%;
--$0 class O at 'Dsf'; RE 0%;
--$0 class P at 'Dsf'; RE 0%.
The class A-1, A-2, A-2F, B, C, D, E, F, G, H, J, K and L certificates have paid in full. Fitch does not rate the class Q certificates or the subordinate component class V-1, V-2, V-3, V-4 and V-5 certificates. Fitch previously withdrew the rating on the interest-only class XC certificates.
Additional information is available at www.fitchratings.com.
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Dodd-Frank Rating Information Disclosure Form
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