News Column

Fitch Takes Various Actions on LB 2006-LLF C5

May 19, 2014

NEW YORK--(BUSINESS WIRE)-- Fitch Ratings has upgraded two classes and downgraded one class of Lehman Brothers Floating Rate Commercial Mortgage Trust, series 2006-LLF C5. A detailed list of rating actions follows at the end of this release.

KEY RATING DRIVERS

The upgrades are primarily the result of increased credit enhancement from the disposition of three loans since the prior rating action, along with improved performance of the one remaining loan. At the previous rating action, four loans remained in the transaction; the final remaining loan in the trust is secured by the Continental Grand II office property. The downgrade of class K is due to realized losses from the disposition of one loan, National Conference Center, which formerly represented 9% of the pool.

Continental Grand II is a 238,388 square foot (sf) office building located in the Superblock area of El Segundo, CA, within the greater South Bay area of Los Angeles. Occupancy at the property declined significantly in 2010 after a former tenant vacated 42.8% of the net rentable area. Occupancy, which fell to as low as 50%, has since recovered to 79% as of the March 2014 rent roll. The servicer also indicated that the sponsor, Tishman Speyer Real Estate Venture, continues to work on additional leasing prospects.

Average in-place rents at the property are approximately $29 psf, which is inline with current market asking rates, per REIS. Additionally, according to REIS, sub-market property sales information indicates a mean sales trade estimate of $250 psf for the trailing 12-month period. The securitized debt on the subject property equates to roughly $149 psf, based on the net rentable area, which is well under the comp set average.

RATING SENSITIVITIES

Fitch modeled the loan cash flow based on the servicer provided YE 2013 net operating income, with an adjustment considered for ongoing leasing costs. Continental Grand's hard maturity date comes in August 2014, and it is expected the loan will refinance on or prior to its maturity. The ratings are expected to remain stable.

The final rated maturity for the transaction is September 1, 2021.

Fitch upgrades the following classes and assigns Outlooks as indicated:

--$7.5 million class H to 'Asf' from 'CCCsf'; Outlook Stable;

--$3.7 million class J to 'BBBsf' from 'CCCsf'; Outlook Stable.

In addition, Fitch downgrades the following distressed class:

--$24.1 million class K to 'Dsf' from 'CCsf'; RE 65%.

Furthermore, Fitch affirms the following distressed class:

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

Additional information is available at 'www.fitchratings.com'.

Applicable Criteria and Related Research:

--'Global Structured Finance Rating Criteria' (May 24, 2013);

--'Criteria for Analyzing Large Loans in U.S. Commercial Mortgage Transactions' (Sept. 20, 2013).

Applicable Criteria and Related Research:

Global Structured Finance Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=708661

Criteria for Analyzing Large Loans in U.S. Commercial Mortgage Transactions

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=718468

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=830725

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.



Fitch Ratings

Primary Analyst

Chris Bushart

Senior Director

+1-212-908-0606

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

Source: Fitch Ratings


For more stories on investments and markets, please see HispanicBusiness' Finance Channel



Source: Business Wire


Story Tools






HispanicBusiness.com Facebook Linkedin Twitter RSS Feed Email Alerts & Newsletters