Fitch Downgrades 1 Class of Banc of America Commercial Mortgage, Series 2004-4; Assigns Outlooks

CHICAGO--(BUSINESS WIRE)--Fitch Ratings downgrades Banc of America Commercial Mortgage Inc., commercial mortgage pass-through certificates, series 2004-4 as follows:

--$4.9 million class O to 'CCC/DR1' from 'B-'.

In addition, Fitch affirms and assigns Rating Outlooks to the following classes:

--$13.9 million class A-2 at 'AAA'; Outlook Stable;

--$240 million class A-3 at 'AAA'; Outlook Stable;

--$225 million class A-4 at 'AAA'; Outlook Stable;

--$107 million class A-5 at 'AAA'; Outlook Stable;

--$272.2 million class A-6 at 'AAA'; Outlook Stable;

--$150 million class A-1A at 'AAA'; Outlook Stable;

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

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

--$35.6 million class B at 'AA'; Outlook Stable;

--$11.3 million class C at 'AA-'; Outlook Stable;

--$21.1 million class D at 'A'; Outlook Stable;

--$9.7 million class E at 'A-'; Outlook Stable;

--$16.2 million class F at 'BBB+'; Outlook Stable;

--$11.3 million class G at 'BBB'; Outlook Stable;

--$16.2 million class H at 'BBB-'; Outlook Stable;

--$6.5 million class J at 'BB+'; Outlook Stable;

--$6.5 million class K at 'BB'; Outlook Negative;

--$6.5 million class at L 'BB-'; Outlook Negative;

--$3.2 million class M at 'B+'; Outlook Negative;

--$3.2 million class N at 'B'; Outlook Negative;

--$2.2 million class DM-A at 'A+'; Outlook Stable;

--$4.6 million class DM-B at 'A'; Outlook Stable;

--$3.7 million class DM-C at 'A-'; Outlook Stable;

--$3.9 million class DM-D at 'BBB+'; Outlook Stable;

--$4.2 million class DM-E at 'BBB'; Outlook Stable;

--$3.8 million class DM-F at 'BBB-'; Outlook Stable;

--$3.5 million class DM-G at 'BBB-'; Outlook Stable.

Fitch does not rate the $16.2 million P and $103 million BC classes. Class A-1 has paid in full.

The downgrade of class O is due to projected losses on the specially serviced loan (1.6%).

The affirmations are the result of sufficient credit enhancement and stable performance of the non-specially serviced loans. Classes K through N have been assigned Negative Outlooks based on an assumption of defaults and losses on the Fitch loans of concern (7.5%). The Rating Outlooks reflect the likely direction of any rating changes over the next one to two years. As of the November 2008 distribution date, the pool's aggregate principal balance has decreased 8.6% to $1.3 billion from $1.43 billion at issuance. Nine loans, 8.1% of the pool, have defeased.

The specially serviced loan (1.6%) is secured by a 723,971 square foot (sf) warehouse located in North Kingstown, RI. The loan transferred to special servicing on Oct. 14, 2008 for payment default. The June 2008 servicer-reported occupancy at the property was 51%. Expected losses are anticipated to be absorbed by the non-rated class P.

Fitch maintains investment-grade shadow ratings on five loans in the trust: The Bank of America Center (11.5%), Dallas Market Center (4.7%), Northpointe Plaza (2.4%), Inland Southwest Portfolio/Heritage Towne Crossing (1.1%) and Wrangler Company (0.9%).

The Bank of America Center is secured by a three-building complex with a total of 1.8 million sf in San Francisco, CA. Second quarter 2008 occupancy was 94%, compared to 93.7% at issuance. The loan is interest only and has a maturity date in August 2011.

The Dallas Market Center is secured by a 3.2 million sf merchandise mart in Dallas, TX. Occupancy as of year-end (YE) 2007 was 92% and at issuance was 94%. The loan has a coupon of 6.1% and matures in September 2014.

Northpointe Plaza is secured by a 360,880 sf portion of the 461,118 sf foot retail power center in Spokane, WA. Occupancy was 92% as of second quarter 2008, compared to 98% at issuance. The second quarter 2008 servicer reported debt service coverage ratio (DSCR) was 2.78 times (x). The interest only loan has a coupon of 4.29% and matures in July 2009.

The Inland Southwest Portfolio/Heritage Towne Crossing is secured by two single-tenant drug stores in Oklahoma and one shadow-anchored retail center in Euless, TX, with a total of 108,287 sf. The retail center was 93% occupied as of second quarter 2008. The interest only loan has a coupon of 4.37% and matures in May 2009.

Wrangler Company is secured by a 316,800 sf industrial distribution center in El Paso, TX. The property is 100% leased for the term of the loan. The interest only loan has a coupon of 5.09% and matures in August 2009.

None of the non-defeased loans in the pool are scheduled to mature in 2008 and 23 non-defeased loans (17.8%) are scheduled to mature in 2009. The YE 2007 weighted average DSCR for the non-defeased loans maturing in 2009 is 2.40x. The weighted average coupon for all of the transaction's non-defeased loans is 5.47% and the range is 4.11% to 6.73%.

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