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Rating Action:

Moody's Upgrades Five and Affirms One CMBS Class of WAMU 2003-C1

20 Jun 2013

Approximately $15.3 Million of Structured Securities Affected

New York, June 20, 2013 -- Moody's Investors Service (Moody's) upgraded the ratings of five classes and affirmed one class of Washington Mutual Asset Securities Corp., Series 2003-C1 Mortgage Pass-Through Certificates, follows:

Cl. K, Upgraded to Aaa (sf); previously on Jul 20, 2012 Upgraded to Aa3 (sf)

Cl. L, Upgraded to Aaa (sf); previously on Jul 20, 2012 Upgraded to Baa1 (sf)

Cl. M, Upgraded to Aaa (sf); previously on Jul 20, 2012 Upgraded to Ba2 (sf)

Cl. N, Upgraded to Baa3 (sf); previously on Jul 20, 2012 Upgraded to B2 (sf)

Cl. O, Upgraded to Ba1 (sf); previously on Jul 20, 2012 Upgraded to B3 (sf)

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

RATINGS RATIONALE

The upgrades are due to increased credit support from loan payoffs and amortization as well as anticipated pay downs from loans approaching maturity that are well positioned for refinance. The pool has paid down 67% since Moody's prior review and 97% since securitization. The remaining loans are performing well and are low levered.

Moody's rating action reflects a base expected loss of 1.3% of the current balance compared to 2.2% at last review. Base expected losses and realized losses have decreased to 0.1% of the original balance from 0.2% at last review. Moody's provides a current list of base losses for conduit and fusion CMBS transactions on moodys.com at http://v3.moodys.com/viewresearchdoc.aspx?docid=PBS_SF215255.

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 current 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 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 methodologies used in this rating were "Moody's Approach to Rating U.S. CMBS Conduit Transactions" published in September 2000 and "Moody's Approach to Rating CMBS Large Loan/Single Borrower Transactions" published in July 2000. 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 CMBS Conduit Model v 2.62 which is used for both conduit and fusion transactions. Conduit model results at the Aa2 (sf) level are driven by property type, Moody's actual and stressed DSCR, and Moody's property quality grade (which reflects the capitalization rate used by Moody's to estimate Moody's value). Conduit model results at the B2 (sf) level are driven by a paydown analysis based on the individual loan level Moody's LTV ratio. Moody's Herfindahl score (Herf), a measure of loan level diversity, is a primary determinant of pool level diversity and has a greater impact on senior certificates. Other concentrations and correlations may be considered in our analysis. Based on the model pooled credit enhancement levels at Aa2 (sf) and B2 (sf), the remaining conduit classes are either interpolated between these two data points or determined based on a multiple or ratio of either of these two data points. For fusion deals, the credit enhancement for loans with investment-grade credit assessments is melded with the conduit model credit enhancement into an overall model result. Fusion loan credit enhancement is based on the credit assessment of the loan which corresponds to a range of credit enhancement levels. Actual fusion credit enhancement levels are selected based on loan level diversity, pool leverage and other concentrations and correlations within the pool. Negative pooling, or adding credit enhancement at the credit assessment level, is incorporated for loans with similar credit assessments in the same transaction.

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. The pool has a Herf of 2 compared to 9 at last review.

In cases where the Herf falls below 20, Moody's also employs the large loan/single borrower methodology. This methodology uses the excel-based Large Loan Model v 8.5 and then reconciles and weights the results from Conduit and Large Loan models in formulating a rating recommendation. 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 a review utilizing MOST® (Moody's Surveillance Trends) Reports and a proprietary program that highlights significant credit changes that have occurred in the last month as well as cumulative changes since the last full transaction review. 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 press release dated July 20, 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 28, 2013 distribution date, the transaction's aggregate certificate balance has decreased by 97% to $15.3 million from $571.9 million at securitization. The Certificates are collateralized by seven mortgage loans. The largest loan represents 72% of the pool balance. There are no defeased loans in the pool.

Four loans have been liquidated from the pool, resulting in an aggregate realized loss of $589 thousand (2.3% loss severity). There are no loans on the watchlist or in special servicing and all loans were current as of the distribution date.

Moody's was provided with full year 2011 and 2012 operating results for 100% and 98% of the pool respectively. Moody's weighted average LTV is 33% compared to 63% at Moody's prior review. Moody's value reflects a weighted average capitalization rate of 9.6%.

Moody's actual and stressed DSCRs are 1.41X and 3.39X, respectively, compared to 1.39X and 1.80X at last review. Moody's actual DSCR is based on Moody's net cash flow (NCF) and the loan's actual debt service. Moody's stressed DSCR is based on Moody's NCF and a 9.25% stressed rate applied to the loan balance.

The top three performing loans represent 88% of the pool. The largest loan is the Center Pointe Plaza Loan ($11 million -- 72% of the pool). The loan is secured by a 252,000 square foot, single-story power center in Christiana, Delaware. The lead tenant is The Home Depot Inc. (Moody's senior unsecured rating A3, stable outlook). The property was 100% leased as of March 2013 compared to 96% at Moody's last review and 100% at securitization. Since last review the top three tenants, representing 73% of the net rentable area (NRA), renewed their leases. Home Depot, the largest tenant, renewed through January 2018. The other two tenants, Babies R Us and TJ Maxx, renewed their leases through January 2023. The loan's scheduled maturity is early 2014. Moody's current LTV and stressed DSCR are 31% and 3.35X, respectively, compared to 50% and 2.11X at last review.

The second largest loan is the Hogg Palace Lofts Loan ($1.5 million -- 10% of the pool). The loan is secured by a 80-unit apartment building in Houston, Texas. The property was 98% leased as of year-end 2012. Performance has been stable. Moody's current LTV and stressed DSCR are 24% and 4.31X, respectively, compared to 38% and 2.67X at last review.

The third largest loan is the Hill Creek Apartments Loan ($1 million -- 7% of the pool). The loan is secured by a 58-unit multifamily property in Boise, Idaho. The property was 98% leased as of year-end 2012 compared to 92% at year-end 2011. Moody's current LTV and stressed DSCR are 49% and 1.86X respectively, compared to 61% and 1.50X at 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.

Regulatory disclosures contained in this press release apply to the credit rating and, if applicable, the related rating outlook or rating review.

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.

Benjamin Abrams
Associate Analyst
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 Five and Affirms One CMBS Class of WAMU 2003-C1
No Related Data.
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