News Column

Fitch Affirms Sandelman Realty CRE CDO I

June 25, 2014



NEW YORK--(BUSINESS WIRE)-- Fitch Ratings has affirmed three classes of Sandelman Realty CRE CDO I, LTD (Sandelman Realty CRE CDO I). Fitch's performance expectation incorporates prospective views regarding commercial real estate market value and cash flow declines. A detailed list of rating actions follows at the end of this release.

KEY RATING DRIVERS

Since the last rating action, the CDO has continued to effectively liquidate and, as of the May 2014 trustee report, only one asset remains - a 22% interest in the REO Sawgrass Marriott Golf Resort & Spa, a full service hotel located in Ponte Vedra Beach, FL. The property consists of 348 guest rooms, multiple restaurants, 160 golf villas, and a beach club. Ownership recently completed approximately $18 million in renovation work and are reportedly marketing the property for sale. A substantial loss is modeled in the base case scenario.

Since the last rating action, total pay down has been approximately $12 million primarily from the discounted sale of two assets. Classes C and D have paid in full and class E is the senior-most class, requiring timely payment of interest. As of the May 2014 payment date, there was no available interest or principal proceeds to pay the interest on the notes, and as a result, class E missed its May 23, 2014 interest payment. However, according to the Trustee, the noteholders have waived the Event of Default. The waiver is revocable at any time. While class E is expected to receive full principal recovery, the affirmation at 'CCCsf' reflects the uncertainty that the waiver will continue until the class is fully redeemed.

In December 2011, asset management responsibilities were transferred to Petra Capital Management, LLC.

RATING SENSITIVITIES

The classes are subject to downgrade should further losses be realized.

Fitch affirms the following ratings:

--$8.5 million class E at 'CCCsf'; RE 100%.

--$13 million class F at 'Csf'; RE 90%;

--$6.7 million class G at 'Csf'; RE 0%.

Classes A-1 through D and S have paid in full.

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

Applicable Criteria and Related Research:

--'Global Structured Finance Rating Criteria' (May 20, 2014);

--'Surveillance Criteria for U.S. CREL CDOs and CMBS Large Loan Floating-Rate Transactions' (Nov. 25, 2013).

Applicable Criteria and Related Research:

Global Structured Finance Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=748821

Surveillance Criteria for U.S. CREL CDOs and CMBS Large Loan Floating-Rate Transactions

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=723059

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=836541

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 Surveillance Analyst

Stacey McGovern

Director

+1-212-908-0722

Fitch Ratings, Inc.

33 Whitehall Street

New York, NY 10004

or

Committee Chairperson

Britt Johnson

Senior Director

+1-312-606-2341

or

Media Relations

Sandro Scenga, New York, +1-212-908-0278

sandro.scenga@fitchratings.com

Source: Fitch Ratings


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