NEW YORK--(BUSINESS WIRE)--Fitch Ratings has downgraded five and affirmed 17 classes of Merrill Lynch Mortgage Trust (MLMT) series 2008-C1, commercial mortgage pass-through certificates. A detailed list of rating actions follows at the end of this press release.
KEY RATING DRIVERS
The downgrades reflect increased loss expectations. The downgrade to class M is a result of incurred losses. Fitch modeled losses of 12.3% of the remaining pool; expected losses on the original pool balance total 9.8%, including $33.1 million (3.5% of the original pool balance) in realized losses to date. As of the November 2016 distribution date, the pool's aggregate principal balance has been reduced by 48.9% to $485.1 million from $948.8 million at issuance. Eight loans (6.9% of pool), including one of the top 15 loans (2.5%), are fully defeased as of November 2016. Interest shortfalls are currently affecting classes L through T.
Loans of Concern: Fitch has designated 19 Fitch Loans of Concern (33.5%), including five (20.2%) of the top 15 loans and three (4.7%) specially serviced loans. The three largest drivers to Fitch losses are the Fort Office Portfolio (9.9%), Landmark Towers (3.3%) and Ashley Overlook (2.9%) due to high rollover concerns and weak office markets.
Pool Concentrations: Loan maturities are concentrated in 2017 (73%) and 2018 (25%). Eleven loans representing 20.7% of the pool are full-term interest only.
Rating Outlooks for classes A4 and A-1A remain Stable as credit enhancement remains high. Negative Rating Outlooks for classes AM and below indicate downgrades are possible should loss expectations increase, particularly if larger loans with significant rollover have difficult re-leasing.
USE OF THIRD-PARTY DUE DILIGENCE PURSUANT TO SEC RULE 17G-10
Form ABS Due Diligence-15E was not provided to, or reviewed by, Fitch in relation to this rating action.
Fitch has downgraded the following classes and revised Outlooks as indicated:
--$41.8 million class AJ to 'Asf' from 'AAsf'; Outlook revised to Negative from Stable;
--$3.7 million class AJ-A to 'Asf' from 'AAsf'; Outlook revised to Negative from Stable;
--$2.2 million class AJ-AF to 'Asf' from 'AAsf'; Outlook revised to Negative from Stable;
--$11.9 million class C to 'BBBsf' from 'Asf'; Outlook Negative;
--$1.3 million class M to 'Dsf' from 'Csf'; RE 0%.
Fitch has affirmed the following classes and revised Outlooks as indicated:
--$221 million class A4 at 'AAAsf'; Outlook Stable;
--$338.1 million class A-1A at 'AAAsf'; Outlook Stable;
--$71.2 million class AM at 'AAAsf'; Outlook revised to Negative from Stable;
--$6.3 million class AM-A at 'AAAsf'; Outlook revised to Negative from Stable;
--$10.7 million class B at 'Asf'; Outlook revised to Negative from Stable;
--$8.3 million class D at 'BBBsf'; Outlook Negative;
--$8.3 million class E at 'BBsf'; Outlook Negative;
--$9.5 million class F at 'Bsf'; Outlook Negative;
--$9.5 million class G at 'CCCsf'; RE 40%;
--$10.7 million class H at 'CCCsf'; RE 0%;
--$11.9 million class J at 'CCsf'; RE 0%;
--$10.7 million class K at 'Csf'; RE 0%.
--$8.3 million class L at 'Csf'; RE 0%;
--$0 class N at 'Dsf'; RE 0%;
--$0 class P at 'Dsf'; RE 0%;
--$0 class Q at 'Dsf'; RE 0%;
--$0 class S at 'Dsf'; RE 0%.
The class A-1, A-2, A-3, A-SB, A-1AF and AM-AF certificates have paid in full. Fitch does not rate the class T certificates. Fitch previously withdrew the rating on the interest-only class X certificates
Additional information is available at www.fitchratings.com.
Counterparty Criteria for Structured Finance and Covered Bonds (pub. 01 Sep 2016)
Global Structured Finance Rating Criteria (pub. 27 Jun 2016)
North America and Asia-Pacific Multiborrower CMBS Surveillance Criteria (pub. 01 Dec 2016)
Dodd-Frank Rating Information Disclosure Form
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