Fitch Affirms BACM 2007-3; Assigns Outlooks

NEW YORK--(BUSINESS WIRE)--Fitch Ratings has affirmed and assigned Outlooks to Banc of America Commercial Mortgage Securities, Inc.'s (BACM) mortgage pass-through certificates, series 2007-3, as follows:

--$47.4 million class A-1 at 'AAA'; Outlook Stable;

--$334 million class A-2 at 'AAA'; Outlook Stable;

--$150 million class A-2FL at 'AAA'; Outlook Stable;

--$133 million class A-3 at 'AAA'; Outlook Stable;

--$78.9 million class A-AB at 'AAA'; Outlook Stable;

--$1 billion class A-4 at 'AAA'; Outlook Stable;

--$50 million class A-5 at 'AAA'; Outlook Stable;

--$647.6 million class A-1A at 'AAA'; Outlook Stable;

--Interest-only class XW at 'AAA'; Outlook Stable;

--$116.6 million class A-M at 'AAA'; Outlook Stable;

--$100 million class A-MF at 'AAA'; Outlook Stable;

--$135 million class A-MFL at 'AAA'; Outlook Stable;

--$241.7 million class A-J at 'AAA'; Outlook Stable;

--$35.2 million class B at 'AA+'; Outlook Stable;

--$48.3 million class C at 'AA'; Outlook Stable;

--$26.4 million class D at 'AA-'; Outlook Stable;

--$26.4 million class E at 'A+'; Outlook Stable;

--$35.2 million class F at 'A'; Outlook Stable;

--$30.8 million class G at 'A-'; Outlook Stable;

--$48.3 million class H at 'BBB+'; Outlook Stable;

--$35.2 million class J at 'BBB'; Outlook Stable;

--$43.9 million class K at 'BBB-'; Outlook Stable;

--$26.4 million class L at 'BB+'; Outlook Stable;

--$4.4 million class M at 'BB'; Outlook Stable;

--$17.6 million class N at 'BB-'; Outlook Negative;

--$4.4 million class O at 'B+'; Outlook Negative;

--$8.8 million class P at 'B'; Outlook Negative;

--$13.2 million class Q at 'B-'; Outlook Negative.

Fitch does not rate the $57.1 million class S.

The affirmations are the result of stable performance since Fitch's last review in August 2008. Classes N through Q have been assigned Negative Outlooks due to potential declines in credit enhancement. Rating outlooks reflect likely rating changes over the next one to two years.

As of the September 2008 distribution date, the pool's certificate balance has decreased 0.1% to $3.51 billion from $3.52 billion at issuance. There have been no delinquencies or specially serviced loans since issuance; 115 loans (94.7%) are interest-only or partial interest-only.

Fitch has identified 10 Loans of Concern (7.9%), including one top-10 loan, Second & Seneca (5%), secured by a 497,271 square foot (sf) office building in Seattle, WA. The property is in the process of stabilizing, with a servicer-reported June 2008 debt service coverage ratio (DSCR) of 0.83 times (x) compared to an underwritten level of 1.28x. The loan does not have any reserves and is scheduled to mature in May 2017. Reported June 2008 occupancy was 93.4%, a slight decline from issuance.

The largest loan, Presidential Towers (9.3%), is collateralized by four interconnected, 50-story apartment towers located in downtown Chicago, IL. Servicer-reported June 2008 DSCR and occupancy was 1.04x and 90.3%, respectively. Occupancy at issuance was 92.5%. The loan currently has over $10 million in reserves to cover debt service and capital expenditures.

The second-largest loan, Renaissance Mayflower Hotel (5.7%), is secured by a 657 key full-service hotel located in Washington, D.C. Servicer-reported trailing 12-month (TTM) occupancy was 72% as of June 2008, compared to 73.9% at issuance.

The third-largest loan, One Park Avenue (5.3%), is secured by an office property in Manhattan and is in the process of stabilizing. The loan is pari passu with the A-1 note securitized in BACM 2007-2. Fitch has reviewed the updated occupancy, reserve expenditure, and cash flow information has determined that they are in-line with the stabilization schedule set forth at issuance. Fitch will continue to monitor the loan.

1001-1007 Third Avenue, located in Manhattan (0.4%), maintains its investment-grade shadow rating. The loan is secured by a two-story single-tenant building of 13,149 sf and is currently occupied by a three-screen movie theater.

Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, 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.