Approximately $50 Million of Structured Securities Affected
New York, November 18, 2010 -- Moody's Investors Service (Moody's) upgraded the ratings of one class
and affirmed three classes of N-45 First CMBS Issuer Corporation,
Series 2001-1 as follows:
Cl. C, Affirmed at Aaa (sf); previously on Jan 26,
2006 Upgraded to Aaa (sf)
Cl. D, Affirmed at Aaa (sf); previously on Sep 11,
2007 Upgraded to Aaa (sf)
Cl. E, Upgraded to A1 (sf); previously on Sep 11,
2007 Upgraded to Baa1 (sf)
Cl. IO, Affirmed at Aaa (sf); previously on Apr 11,
2001 Definitive Rating Assigned Aaa (sf)
The upgrades are due to the increase in subordination due to amortization
and a loan pay that paid off in June 2010. The pool has paid down
by 46% since Moody's last review. The affirmations are due
to key parameters, including Moody's loan to value (LTV) ratio and
Moody's stressed debt service coverage ratio (DSCR) remaining within acceptable
ranges. Additionally, Class F, which is not rated by
Moody's, provides additional credit support for the Moody's
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 stressed macroeconomic
environment and continuing weakness in the commercial real estate and
lending markets. Moody's currently views the commercial real estate
market as stressed with further performance declines expected in the industrial,
office, and retail sectors. Hotel performance has begun to
rebound, albeit off a very weak base. Multifamily has also
begun to rebound reflecting an improved supply / demand relationship.
The availability of debt capital is improving with terms returning towards
market norms. Job growth and housing price stability will be necessary
precursors to commercial real estate recovery. Overall, Moody's
central global scenario remains "Hook-shaped" for 2010 and 2011;
we expect overall a sluggish recovery in most of the world's largest economies,
returning to trend growth rate with elevated fiscal deficits and persistent
The principal methodologies used in these ratings were "Moody's Approach
to Rating Large Loan/Single Borrower Transactions" published in July 2000,
and "Moody's Approach to Rating Canadian CMBS" published in May 2000.
In addition, Moody's publishes a weekly summary of structured finance
credit, ratings and methodologies, available to all registered
users of our website, at www.moodys.com/SFQuickCheck.
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 press release dated December 10, 2009.
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.
As of the November 15, 2010 distribution date, the transaction's
aggregate certificate balance has decreased to $53.2 million
from $97.8 million at last review. The Certificates
are collateralized by three fixed rate mortgage loans on two retail properties
and one mixed-use office and retail complex located in Canada.
The overall pool performance has been very stable and continues to benefit
from short amortization schedules.
The Queen's Quay Terminal Loan ($32 million -- 60%
of pooled balance) is secured by a mixed-use office and retail
complex that is located in the Harbourfront District of Toronto,
Canada. The collateral for the loan contains 428,000 square
feet of office space and 75,000 square feet of retail space that
caters primarily to the tourist trade. As of August 2010 occupancy
was 99%. The largest tenants are Bell Canada and Labatt
Brewing Company LTD. The loan amortizes based on a 25-year
schedule, and matures in March 2011. The loan sponsor is
Brookfield Properties Corporation. Moody's current underlying rating
is A2 compared to Baa2 at last review.
The Galeries de Terrebone Loan ($12 million -- 22%
of pooled balance) is secured by a 340,000 square foot enclosed
community retail center located in Terrebonne, Quebec, approximately
45 kilometers north of Montreal. Major tenants include Zellers
and Provigo. Occupancy has been steady at 98% for the last
few years. Comparable in-line sales has slipped slightly
in 2009 to CAN$395 per square foot from CAN$404 per square
foot in 2008. The loan amortizes based on a 17-year schedule.
The loan sponsor is Westcliff Group, a private real estate developer
and manager located in Quebec. Moody's current underlying rating
is Aaa, the same as at last review.
The Complexe Pointe-Claire Loan ($9 million - 18%
of pooled balance) is secured by a 300,000 square foot community
shopping center located in Pointe-Claire, approximately 25
kilometers from downtown Montreal. As of June 2010, occupancy
was 100%, the same as last review. Major tenants include
Maxi and Toys R Us. The loan amortizes based on a 17-year
schedule. The loan sponsor is Westcliff Group, a private
real restate developer and manager located in Quebec. Moody's current
underlying rating is Aaa, the same as at last review.
Moody's pooled net cash flow and value are $13 million and $135
million. Moody's loan to value (LTV) ratio is 46% and Moody's
stressed debt service coverage ratio (DSCR) is 2.64X. Moody's
credit metrics during the last review were 49% and 2.31X,
Information sources used to prepare the credit rating are the following:
parties involved in the ratings, parties not involved in the ratings,
public information, and confidential and proprietary Moody's Investors
Moody's Investors Service considers the quality of information available
on the issuer or obligation satisfactory for the purposes of maintaining
a credit rating.
Moody's adopts all necessary measures so that the information it uses
in assigning a credit rating is of sufficient quality and from sources
Moody's considers to be reliable including, when appropriate,
independent third-party sources. However, Moody's
is not an auditor and cannot in every instance independently verify or
validate information received in the rating process.
Please see ratings tab on the issuer/entity page on Moodys.com
for the last rating action and the rating history.
The date on which some Credit Ratings were first released goes back to
a time before Moody's Investors Service's Credit Ratings were fully digitized
and accurate data may not be available. Consequently, Moody's
Investors Service provides a date that it believes is the most reliable
and accurate based on the information that is available to it.
Please see the ratings disclosure page on our website www.moodys.com
for further information.
Please see the Credit Policy page on Moodys.com for the methodologies
used in determining ratings, further information on the meaning
of each rating category and the definition of default and recovery.
Eun Jee Park
VP - Senior Credit Officer
Structured Finance Group
Moody's Investors Service
Michael M. Gerdes
Senior Vice President
Structured Finance Group
Moody's Investors Service
Moody's Investors Service
Moody's Upgrades One and Affirms Three CMBS Classes of N-45 2001-1
250 Greenwich Street
New York, NY 10007