Approximately $1.8 Billion of Structured Securities Affected
New York, March 04, 2009 -- Moody's Investors Service ("Moody's") downgraded
ten pooled Classes and two rake Classes of Banc of America Large Loan,
Inc. Commercial Mortgage Pass-Through Certificates,
Series 2007-BMB1 due to higher expected losses for the pool resulting
from anticipated increases in leverage and reductions in debt service
coverage. Moody's also affirmed four pooled Classes.
This review is part of a first quarter 2009 ratings sweep of large loan
and single borrower transactions. Our review incorporates assumptions
for capitalization rates and stressed cash flows that were outlined in
"Rating Methodology Update: U.S. CMBS Review
Prompted by Declining Property Values and Rising Delinquencies"
dated February 4, 2009.
Due to the current economic recession, Moody's expects a significant
overall decline in future property cash flows as a result of a higher
incidence of tenant defaults and bankruptcies and a sharp decline in lease
renewal rates. This drop in cash flows is likely to lead to a marked
increase in term defaults on commercial mortgage loans particularly for
those loans that were underwritten with significant upside at a peak point
in the real estate cycle and valued using historically low capitalization
rates. Moody's is undertaking this review to ensure that
the ratings reflect our expectation of weaker future performance in an
adverse economic climate.
As of the February 17, 2009 distribution date, the transaction's
aggregate certificate balance has decreased by 1% to $1.80
billion from $1.82 billion at securitization. The
Certificates are collateralized by 14 mortgage loans ranging in size from
less than 1% to 24% of the pool, with the top three
loans representing 59% of the pool.
Moody's weighted average pooled loan to value ("LTV")
ratio is 94% compared to 68% at securitization. Moody's
stressed debt service coverage ratio ("DSCR") is 1.29x
compared to 1.50x at securitization.
There are no loans currently in special servicing.
Moody's rating action is as follows:
-Class A-1, $714,425,072,
affirmed at Aaa; previously assigned Aaa on 10/26/2007
-Class A-1A, $403,605,720,
affirmed at Aaa; previously assigned Aaa on 10/26/2007
-Class X, Notional, affirmed at Aaa; previously
assigned Aaa on 10/26/2007
-Class A-2, $244,757,000,
affirmed at Aaa; previously assigned Aaa on 10/26/2007
-Class B, $43,163,000, downgraded
to Aa3 from Aa1; previously assigned Aa1 on 10/26/2007
-Class C, $43,163,000, downgraded
to A2 from Aa2; previously assigned Aa2 on 10/26/2007
-Class D, $34,530,000, downgraded
to A3 from Aa3; previously assigned Aa3 on 10/26/2007
-Class E, $30,214,000, downgraded
to Baa1 from A1; previously assigned A1 on 10/26/2007
-Class F, $30,214,000, downgraded
to Baa2 from A2; previously assigned A2 at on 10/26/2007
-Class G, $30,214,000, downgraded
to Baa3 from A3; previously assigned A3 on 10/26/2007
-Class H, $30,214,000, downgraded
to Ba1 from Baa1; previously assigned Baa1 on 10/26/2007
-Class J, $30,214,000, downgraded
to Ba3 from Baa2; previously assigned Baa2 on 10/26/2007
-Class K, $30,214,000, downgraded
to B1 from Baa3; previously assigned Baa3 on 10/26/2007
-Class L, $38,846,500, downgraded
to B3 from Ba1; previously assigned Ba1 on 10/26/2007
-Class FMH-1, $47,539,094,
downgraded to A2 from Aa2; previously assigned Aa2 on 10/26/2007
-Class FMH-2, $45,295,185,
downgraded to Baa2 from A2; previously assigned A2 on 10/26/2007
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 review is summarized in a Pre-Sale Report dated 9/27/07.
The principal methodology used in rating and monitoring this transaction
is "Rating Methodology Update: U.S. CMBS Review Prompted
by Declining Property Values and Rising Delinquencies" dated February
4, 2009, which can be found at www.moodys.com
in the Credit Policy & Methodologies directory, in the Ratings
Methodologies subdirectory. Other methodologies and factors that
may have been considered in the process of rating this issue can also
be found in the Credit Policy & Methodologies directory.
New York
Robb Paltz
Vice President - Senior Analyst
Structured Finance Group
Moody's Investors Service
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653
New York
Andrea M. Daniels
VP - Senior Credit Officer
Structured Finance Group
Moody's Investors Service
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653
Moody's Downgrades 12 Classes of Banc of America 2007-BMB1