Moody's Upgrades Two Classes and Downgrades Two Classes of Banc of America Commercial Mortgage Inc., Series 2001-1
Approximately $738.2 Million of Structured Securities Affected
New York, October 13, 2006 -- Moody's Investors Service upgraded the ratings of two classes,
affirmed the ratings of 12 classes and downgraded the ratings of two classes
of Banc of America Commercial Mortgage Inc., Commercial Mortgage
Pass-Through Certificates, Series 2001-1 as follows:
-Class A-2, $505,200,871,
Fixed, affirmed at Aaa
-Class A-2F, $47,858,063,
Floating, affirmed at Aaa
-Class X, Notional, affirmed at Aaa
-Class B, $35,576,642, Fixed,
affirmed at Aaa
-Class C, $21,345,985, Fixed,
upgraded to Aa2 from Aa3
-Class D, $18,974,209, Fixed,
upgraded to A1 from A2
-Class E, $9,487,105, Fixed,
affirmed at A3
-Class F, $9,487,105, Fixed,
affirmed at Baa1
-Class G, $18,974,209 Fixed, affirmed
-Class H, $14,230,657, Fixed,
affirmed at Baa3
-Class J, $13,281,946, Fixed,
affirmed at Ba1
-Class K, $23,480,584, Fixed,
affirmed at B1
-Class L, $2,134,598, Fixed,
affirmed at B2
-Class M, $5,538,842, Fixed,
affirmed at B3
-Class N, $6,788,329, Fixed,
downgraded to Caa3 from Caa2
-Class O, $5,883,218, Fixed,
downgraded to C from Ca
As of the September 15, 2006 distribution date, the transaction's
aggregate certificate balance has decreased by approximately 21.6%
to $743.6 million from $948.1 million at securitization.
The Certificates are collateralized by 154 mortgage loans ranging from
less than 1.0% to 11.7% of the pool,
with the top 10 loans representing 35.0% of the pool.
The largest loan in the pool is shadow rated investment grade.
Eighteen loans, representing 11.7% of the pool,
have defeased and are secured by U.S. Government securities.
Sixteen loans have been liquidated from the pool resulting in aggregate
realized losses of approximately $18.2 million. Three
loans, representing 2.2% of the pool, are in
special servicing. Moody's has estimated aggregate losses
of approximately $5.3 million for the specially serviced
loans. Thirty nine loans, representing 21.5%
of the pool, are on the master servicer's watchlist.
Four of the pool's top 10 loans are included on the watchlist.
Moody's was provided with year-end 2005 operating results
for 94.2% of the pool's performing loans. Moody's
loan to value ratio ("LTV") for the conduit pool, excluding
the defeased loans, is 87.9%, compared to 91.4%
at Moody's last full review in December 2004 and compared to 87.4%
at securitization. Moody's is upgrading Classes C and D due
to increased credit support, defeasance and stable pool performance.
Classes B and C were upgraded on August 2, 2006 and Class C was
placed on review for a further possible upgrade based on a Q tool based
portfolio review (see "US CMBS: Q Tool Based Portfolio Review
Results in Numerous Upgrades," Moody's Special Report,
August 2, 2006). Moody's is downgrading Classes N and
O due to realized and expected losses from the specially serviced loans
and LTV dispersion. Based on Moody's analysis, 28.8%
of the conduit pool has a LTV greater than 100.0%,
compared to 25.5% at last review and compared to 4.1%
The shadow rated loan is the 315 Park Avenue Loan ($86.7
million - 11.7%), which is secured by a 320,000
square foot Class B office building located in the Midtown South submarket
of New York City. The largest tenant is Credit Suisse (Moody's
LT issuer rating Aa3; stable outlook), which currently occupies
73.8% of the net rentable area (lease expiration April 2017).
The building is currently 92.4% occupied, compared
to 88.0% at last review. Moody's current shadow
rating is Baa3, the same as last review.
The top three conduit loans represent 10.6% of the pool.
The largest conduit loan is the 701 Gateway Loan ($32.1
million - 4.3%), which is secured by a 170,000
square foot office building located in San Francisco, California.
The property is 100.0% leased, the same as at last
review. The largest tenants are Actuate Corporation (43.4%;
lease expiration February 2008) and San Mateo Health (17.3%;
lease expiration December 2010). Although the property has maintained
a stable occupancy, rental income has decreased as tenants have
renewed or executed new leases at lower market rents. Moody's
anticipates that the property's cash flow may decrease further as
current leases expire and new leases are executed at market rents.
Moody's LTV is in excess of 100.0%, compared
to 90.6% at last review.
The second largest conduit loan is the PSC Holding Corp. Office
Building Loan ($22.7 million - 3.0%),
which is secured by a 328,900 square foot office building and a
26,000 square foot free-standing conference center.
The property is located in Scottsdale, Arizona and is 100.0%
leased to PCS Health Systems (lease expiration September 2021).
Moody's LTV is 72.8%, compared to 74.2%
at last review.
The third largest conduit loan is the Talley Plaza Loan ($17.0
million - 2.3%), which is secured by a 223,400
square foot Class B office complex located in Phoenix, Arizona.
The complex was built in phases from 1980 to 1985 and was 68.7%
occupied at year-end 2005, compared to 59.0%
at year-end 2004. At securitization the complex was 95.0%
occupied. The property financial performance has been impacted
by weak office market conditions. The loan is on the master servicer's
watchlist due to low occupancy and low debt service coverage. Moody's
LTV is in excess of 100.0%, the same as at last review.
The pool's collateral is a mix of office (40.2%),
multifamily (24.9%), industrial and self storage (12.9%),
U.S. Government securities (11.7%),
retail (7.0%) and lodging (3.3%). The
collateral properties are located in 29 states. The top five state
concentrations are California (19.7%), New York (14.3%),
Georgia (8.1%), Washington (7.4%) and
Arizona (7.3%). All of the loans are fixed rate.
Structured Finance Group
Moody's Investors Service
VP - Senior Credit Officer
Structured Finance Group
Moody's Investors Service