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Rating Action:

Moody's Upgrades 11 CMBS Classes and Affirms One CMBS Class of BALL 2007-BMB1

30 May 2013

Approximately $400 million of Structured Securities Affected

New York, May 30, 2013 -- Moody's Investors Service (Moody's) upgraded eleven classes, four of which were also Placed on Review for Possible Upgrade, and affirmed one class of Banc of America Large Loan, Inc. Commercial Mortgage Pass-Through Certificates, Series 2007-BMB1.

Cl. A-2, Upgraded to Aaa (sf); previously on Nov 17, 2011 Downgraded to Aa1 (sf)

Cl. B, Upgraded to Aaa (sf); previously on Nov 17, 2011 Downgraded to A1 (sf)

Cl. C, Upgraded to Aa2 (sf) and Placed Under Review for Possible Upgrade; previously on Nov 17, 2011 Downgraded to A3 (sf)

Cl. D, Upgraded to Aa3 (sf) and Placed Under Review for Possible Upgrade; previously on Nov 17, 2011 Downgraded to Baa1 (sf)

Cl. E, Upgraded to A1 (sf) and Placed Under Review for Possible Upgrade; previously on Nov 17, 2011 Downgraded to Baa2 (sf)

Cl. F, Upgraded to A3 (sf) and Placed Under Review for Possible Upgrade; previously on Nov 17, 2011 Downgraded to Baa3 (sf)

Cl. G, Upgraded to Baa1 (sf); previously on Nov 17, 2011 Downgraded to Ba1 (sf)

Cl. H, Upgraded to Ba1 (sf); previously on Nov 17, 2011 Downgraded to Ba3 (sf)

Cl. J, Upgraded to Ba3 (sf); previously on Nov 17, 2011 Confirmed at B2 (sf)

Cl. K, Upgraded to B2 (sf); previously on Nov 17, 2011 Confirmed at Caa2 (sf)

Cl. L, Upgraded to Caa3 (sf); previously on Dec 2, 2010 Downgraded to C (sf)

Cl. X, Affirmed Ba3 (sf); previously on Feb 22, 2012 Downgraded to Ba3 (sf)

RATINGS RATIONALE

The upgrades are due to the payoff of four loans and the paydown of one loan decreasing the pool balance by 52% since last review. The four classes that were placed Under Review for Possible Upgrade will remain under review until Moody's receives more clarity on the refinance of the Blackstone Hotel Portfolio. The rating of the IO Class, Class X, is consistent with the expected credit performance of its referenced classes and thus is affirmed.

The performance expectations for a given variable indicate Moody's forward-looking view of the likely range of performance over the medium term. From time to time, Moody's may, if warranted, change these expectations. Performance that falls outside the given range may indicate that the collateral's credit quality is stronger or weaker than Moody's had anticipated when the related securities ratings were issued. Even so, a deviation from the expected range will not necessarily result in a rating action nor does performance within expectations preclude such actions. The decision to take (or not take) a rating action is dependent on an assessment of a range of factors including, but not exclusively, the performance metrics.

Primary sources of assumption uncertainty are the extent of growth in the current macroeconomic environment given the weak pace of recovery in the commercial real estate property markets. Commercial real estate property values are continuing to move in a modestly positive direction along with a rise in investment activity and stabilization in core property type performance. Limited new construction and moderate job growth have aided this improvement. However, a consistent upward trend will not be evident until the volume of investment activity steadily increases for a significant period, non-performing properties are cleared from the pipeline, and fears of a Euro area recession are abated.

The hotel sector continues to exhibit growth albeit at a slightly slower pace. The multifamily sector should remain stable with moderate growth. Gradual recovery in the office sector continues and will be assisted in the next quarter when absorption is likely to outpace completions. However, since office demand is closely tied to employment, we expect regional employment growth to provide market differentiation. CBD markets continue to outperform secondary suburban markets. The retail sector exhibited a slight reduction in vacancies in the first quarter; the largest drop since 2005. However, consumers continue to be cautious as evidenced by sales growth continuing below historical trends. Across all property sectors, the availability of debt capital continues to improve with robust securitization activity of commercial real estate loans supported by a monetary policy of low interest rates.

Moody's central global macroeconomic outlook indicates the global economy has lost momentum over the past quarter as it tries to recover. US GDP growth for 2013 is likely to remain close to 2%, however US sequestration cuts that came into effect in March may create a drag on the positive growth in the US private sector. While the broad economic impact in unclear, the direct effect is likely to shave 0.4% off US GDP growth in 2013. Continuing from the previous quarter, Moody's believes that the three most immediate risks are: i) the risk of an even deeper than currently expected recession in the euro area, accompanied by deeper credit contraction, potentially triggered by a further intensification of the sovereign debt crisis; ii) slower-than-expected recovery in major emerging markets following the recent slowdown; and iii) an escalation of geopolitical tensions, resulting in adverse economic developments.

The principal methodology used in this rating was "Moody's Approach to Rating CMBS Large Loan/Single Borrower Transactions" published in July 2000. The methodology used in rating Class X was "Moody's Approach to Rating Structured Finance Interest-Only Securities" published in February 2012. Please see the Credit Policy page on www.moodys.com for a copy of these methodologies.

Moody's review incorporated the use of the excel-based Large Loan Model v 8.5. 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. The model incorporates the CMBS IO calculator ver1.1 that uses the following inputs to calculate the proposed IO rating based on the published methodology: original and current bond ratings and credit assessments; original and current bond balances grossed up for losses for all bonds the IO(s) reference(s) within the transaction; and IO type corresponding to an IO type as defined in the published methodology. The calculator then returns a calculated IO rating based on both a target and mid-point . For example, a target rating basis for a Baa3 (sf) rating is a 610 rating factor. The midpoint rating basis for a Baa3 (sf) rating is 775 (i.e. the simple average of a Baa3 (sf) rating factor of 610 and a Ba1 (sf) rating factor of 940). If the calculated IO rating factor is 700, the CMBS IO calculator would provide both a Baa3 (sf) and Ba1 (sf) IO indication for consideration by the rating committee.

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 a review utilizing MOST® (Moody's Surveillance Trends) Reports and Remittance Statements. On a periodic basis, Moody's also performs a full transaction review that involves a rating committee and a press release. Moody's prior transaction review is summarized in a presale report dated August 22, 2012. Please see the ratings tab on the issuer / entity page on moodys.com for the last rating action and the ratings history.

DEAL PERFORMANCE

As of the May 15, 2013 distribution date, the transaction's certificate balance decreased by approximately 77% to $400 million from $1.73 billion at securitization due to the payoff of twelve loans and the principal pay down associated with one loan. The Certificates are collateralized by two floating-rate loans representing 75% and 25% of the pooled trust mortgage balance.

The pool has experienced $10.9 million in losses due to the liquidation of the Readers Digest loan in February 2012. There are no interest shortfalls nor are any loans in special servicing.

Moody's weighed average pooled loan to value (LTV) ratio is 81% compared to 78% at last review and 68% at securitization. Moody's pooled stressed DSCR is 1.36X, compared to 1.41X at last review and 1.50X at securitization.

Moody's uses a variation of Herf to measure diversity of loan size, where a higher number represents greater diversity. Loan concentration has an important bearing on potential rating volatility, including risk of multiple notch downgrades under adverse circumstances. The credit neutral Herf score is 40. Large loan transactions generally have a Herf of less than 20. The pool has a Herf of 2, compared to 4 at last review.

The largest pooled exposure is the Stamford Office Portfolio loan ($301.5 million; 75% of the pooled balance) which is secured by seven office properties totaling 1.7 million square feet located in Stamford, Connecticut. As of February 2013, the properties were 86% leased with average in-place net rents of $40.23 per square foot. According to CBRE Econometric Advisors, asking rents for Stamford Class A properties are $37.48 per square foot with a vacancy rate of 17.8%. The loan was modified in 2010 and has an extended maturity date of August 2013 with a one-year extension remaining. The collateral is encumbered with additional debt in the form of a $98.5 million subordinate mortgage and $400 million of mezzanine debt. Moody's current pooled LTV is 91% and stressed DSCR is 1.07X. Moody's current credit assessment is B2, the same as last review.

The Blackstone Hawaii Hotel Portfolio loan ($98.7 million; 25%) is the second largest loan in the pool and is secured by two hotels located in Hawaii. The Marriott Wailea Beach Resort & Spa is a 546-key hotel located on Maui. According to Smith Travel Research, the hotel has shown revenue per available room (RevPAR) increasing 8.4% for the trailing twelve month period ending February 2013, which is slightly above than other Maui hotels reporting RevPAR increases of 6.7% for the same period. The Marriott Waikoloa Beach Resort & Spa is a 555-key hotel located on the big island of Hawaii. The cash flow for this property has been stressed. According to Smith Travel Research, the hotel has shown revenue per available room (RevPAR) increase of 7.2% for the trailing twelve month period ending February 2013, compared to other Hawaii/Kauai hotels reporting RevPAR increases of 13.6% for the same period. The portfolio is also encumbered by a subordinate mortgage of $123 million. The final maturity date for the loan is June 2013. Since last review, the pooled balance has paid down 13%. Moody's current pooled LTV is 50% and stressed DSCR is 2.25X. Moody's current credit assessment is A3, compared to Baa3 last review.

REGULATORY DISCLOSURES

Moody's did not receive or take into account a third-party assessment on the due diligence performed regarding the underlying assets or financial instruments related to the monitoring of this transaction in the past six months.

In conducting surveillance of this credit, Moody's considered performance data contained in servicer and remittance reports. Moody's obtains servicer reports on this transaction on a periodic basis, at least annually.

For ratings issued on a program, series or category/class of debt, this announcement provides certain regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series or category/class of debt or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody's rating practices. For ratings issued on a support provider, this announcement provides certain regulatory disclosures in relation to the rating action on the support provider and in relation to each particular rating action for securities that derive their credit ratings from the support provider's credit rating. For provisional ratings, this announcement provides certain regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.

For any affected securities or rated entities receiving direct credit support from the primary entity(ies) of this rating action, and whose ratings may change as a result of this rating action, the associated regulatory disclosures will be those of the guarantor entity. Exceptions to this approach exist for the following disclosures, if applicable to jurisdiction: Ancillary Services, Disclosure to rated entity, Disclosure from rated entity.

Please see www.moodys.com for any updates on changes to the lead rating analyst and to the Moody's legal entity that has issued the rating.

Please see the ratings tab on the issuer/entity page on www.moodys.com for additional regulatory disclosures for each credit rating.

Annelise Osborne
VP - Senior Credit Officer
Structured Finance Group
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

Michael Gerdes
MD - Structured Finance
Structured Finance Group
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

Releasing Office:
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

Moody's Upgrades 11 CMBS Classes and Affirms One CMBS Class of BALL 2007-BMB1
No Related Data.
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