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I AGREE
22 Apr 2011
Approximately $305.8 Million of Structured Securities Affected
New York, April 22, 2011 -- Moody's Investors Service affirmed the ratings of six classes of RBS Commercial
Funding Inc Commercial Mortgage Pass-Through Certificates,
Series 2010 MB1 as follows:
Cl. A-1, Affirmed at Aaa (sf); previously on
Apr 23, 2010 Definitive Rating Assigned Aaa (sf)
Cl. A-2, Affirmed at Aaa (sf); previously on
Apr 23, 2010 Definitive Rating Assigned Aaa (sf)
Cl. B, Affirmed at Aa2 (sf); previously on Apr 23,
2010 Definitive Rating Assigned Aa2 (sf)
Cl. C, Affirmed at A2 (sf); previously on Apr 23,
2010 Definitive Rating Assigned A2 (sf)
Cl. D, Affirmed at Baa3 (sf); previously on Apr 23,
2010 Definitive Rating Assigned Baa3 (sf)
Cl. X, Affirmed at Aaa (sf); previously on Apr 23,
2010 Definitive Rating Assigned Aaa (sf)
RATINGS RATIONALE
The affirmations are based on the quality of the collateral, the
credit enhancement furnished by the subordinate tranches, and the
structural and legal integrity of the transaction, along with key
parameters, including Moody's loan to value (LTV) ratio and
Moody's stressed debt service coverage ratio (DSCR) remaining within
acceptable ranges.
Moody's analysis reflects a forward-looking view of the likely
range of collateral performance over the medium term. From time
to time, Moody's may, if warranted change these expectations.
Performance that falls outside an acceptable range of the key parameters
may indicate that the collateral's credit quality is stronger or weaker
than Moody's had anticipated during the previous review. Even so,
deviation from the expected range will not necessarily result in a rating
action. There may be mitigating or offsetting factors to an improvement
or decline in collateral performance, such as increased subordination
levels due to amortization and loan payoffs or a decline in subordination
due to realized losses.
Primary sources of assumption uncertainty are the current sluggish macroeconomic
environment and varying performance in the commercial real estate property
markets. However, Moody's expects to see increasing or stabilizing
property values, higher transaction volumes, a slowing in
the pace of loan delinquencies and greater liquidity for commercial real
estate in 2011. The hotel and multifamily sectors are continuing
to show signs of recovery, while recovery in the office and retail
sectors will be tied to recovery of the broader economy. The availability
of debt capital continues to improve with terms returning toward market
norms. Moody's central global macroeconomic scenario reflects an
overall sluggish recovery through 2012, amidst ongoing individual,
corporate and governmental deleveraging, persistent unemployment,
and government budget considerations.
The principal methodology used in this rating was "Moody's Approach to
Rating Large Loan/Single Borrower Transactions" published in July 2000.
Moody's review incorporated the use of the excel-based Large Loan
Model v 8.0. The large loan model derives credit enhancement
levels based on an aggregation of adjusted loan level proceeds derived
from Moody's loan level LTV ratios. Major adjustments to determining
proceeds include leverage, loan structure, property type,
and sponsorship. These aggregated proceeds are then further adjusted
for any pooling benefits associated with loan level diversity, other
concentrations and correlations.
Moody's ratings are determined by a committee process that considers both
quantitative and qualitative factors. Therefore, the rating
outcome may differ from the model output.
The rating action is a result of Moody's on-going surveillance
of commercial mortgage backed securities (CMBS) transactions. Moody's
monitors transactions on a monthly basis through two sets of quantitative
tools -- MOST® (Moody's Surveillance Trends) and CMM
(Commercial Mortgage Metrics) on Trepp -- and on a periodic
basis through a comprehensive review. Moody's prior full review
is summarized in a Pre-Sale Report dated April 5, 2010.
Please see the ratings tab on the issuer / entity page on moodys.com
for the last rating action and the ratings history.
Moody's Investors Service did not receive or take into account a third
party due diligence report on the underlying assets or financial instruments
related to the monitoring of this transaction in the past six months.
DEAL PERFORMANCE
As of the April 15, 2011 Payment Date, the transaction's aggregate
certificate balance has decreased by 1.3% to $305.8
million from $309.7 million at securitization due to scheduled
loan amortization for five loans representing 77% of the pooled
trust balance.
The certificates are collateralized by six fixed-rate loans ranging
in size from 9% to 25% of the pooled trust balance.
The largest loan is $76.4 million or 25% of the pooled
trust balance, and the three largest loans represent 70%
of the pooled trust balance. The pool has not experienced a loss
and there are no loans in special servicing, nor are there any loans
on the master servicer's watchlist. Watch listed loans are
loans which meet certain portfolio review guidelines established as part
of the CRE Finance Council (CREFC) monthly reporting package.
Moody's weighted average pooled LTV ratio is 65%, the same
as at securitization. Moody's stressed debt service coverage ratio
(DSCR) is 1.53x, compared to 1.51x at securitization.
The largest loan is the South Plains Mall Loan ($76.4 million
-- 25% of the pooled balance) secured by a portion
of a 1.1 million square foot dominant regional mall located in
Lubbock, Texas. It is the only regional mall with traditional
anchor stores in its 100-mile trade area. The closest competitive
mall is 120 miles away. As of the December 30, 2010 rent
roll the in-line mall space was 86% leased, compared
to 82% at securitization. The mall has five anchors including
JC Penney, Dillard's Store for Men and Children, Dillard's
Store for Women, Sears and Beall's. Sears is anchor
owned and is therefore not part of the loan collateral. Vacant
space includes an 82,000 square foot outparcel that was formerly
occupied by Mervyn's. The outparcel can be released from
the lien of the loan subject to the satisfaction of certain conditions.
In-line comparable tenant sales for calendar year 2010 were $399
per square foot, a 3% increase over calendar year 2009 sales
of $386 per square foot. The fixed-rate loan amortizes
on a 30-year schedule and matures in April 2015. Total debt
includes a mezzanine loan with an outstanding principal balance of approximately
$27.3 million. Moody's LTV for the trust debt
is 62%, compared to 64% at securitization.
Moody's current credit estimate is Baa1, compared to Baa2
at securitization.
The Four New York Plaza Loan ($72.6 million -- 24%)
is secured by a 1.0 million square foot Class B office building
located in the Downtown Manhattan Financial District at Water and Broad
Streets. Since securitization The New York Daily News signed a
17-year lease for 107,254 square feet that commenced in November
2010. The New York Daily News lease increased the building's
occupancy to 85% from 75% at securitization. JP Morgan
Chase leases 75% of the building through 2025. However,
it has the right to give back up to two floors to the loan sponsor between
2018 and 2022. The fixed-rate loan is interest only for
the entire loan term. The loan matures in February 2015.
The whole loan in the amount of $77.0 million includes a
$4.4 million junior non-trust component. Moody's
LTV is 66%, the same as securitization. Moody's
credit estimate is Baa2, the same as at securitization.
The CCPT Retail Portfolio III Loan ($63.7 million --
21%) is secured by 53 retail properties containing a total of 827,316
net rentable square feet (NRA). All of the properties are cross-collateralized
and cross-defaulted and each is 100% leased by a single
tenant. There are only eight tenants occupying the properties and
no tenant leases expire during the loan term. The largest tenant
is Aaron's (29% of NRA in 24 properties), followed
by Walgreen (14% in eight properties) and Academy Sports (31%
in 3 properties). The portfolio is located across 20 states with
77% of NRA located in five states -- Texas (48%),
Louisiana (15%), Indiana (6%), Nebraska (4%)
and Illinois (4%). Lease expiration dates range from 2022
to 2035. The fixed-rate loan amortizes on a 30-year
schedule and matures in April 2015. Total debt includes a mezzanine
loan with an outstanding principal balance of approximately $10.0
million. The loan sponsor is Cole Credit Property Trust,
Inc. Moody's LTV for the trust debt is 65%,
compared to 66% at securitization. Moody's credit
estimate is Baa2, the same as at securitization.
New York
Jay Rosen
Vice President - Senior Analyst
Structured Finance Group
Moody's Investors Service
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653
New York
Michael M. Gerdes
Senior Vice President
Structured Finance Group
Moody's Investors Service
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653
Moody's Investors Service
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653
Moody's Affirms Six CMBS Classes of RBS Commercial Funding 2010-MB1
No Related Data.
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