Class D through G Trust Certificates affected
Tokyo, December 15, 2010 -- Moody's Japan K.K has today downgraded its rating on the Class
D through Class G trust certificates issued by UDMAC-J1 Trust.
The complete rating actions follow.
Class D, Downgraded to B2 (sf) from Ba3 (sf); previously on
November 25, 2010 Ba3 (sf) Placed Under Review for Possible Downgrade
Class E, Downgraded to Caa1 (sf) from B1 (sf); previously on
November 25, 2010 B1 (sf) Placed Under Review for Possible Downgrade
Class F, Downgraded to Caa2 (sf) from B2 (sf); previously on
November 25, 2010 B2 (sf) Placed Under Review for Possible Downgrade
Class G, Downgraded to Caa3 (sf) from B3 (sf); previously on
November 25, 2010 B3 (sf) Placed Under Review for Possible Downgrade
Deal Name: UDMAC-J1 Trust
Class: Class A through G
Issue Amount (initial): JPY 42.34 billion
Dividend: Floating
Issue Date (initial): September 28, 2007
Final Maturity Date: June, 2013
Underlying Asset (initial): Seven non-recourse loans backed
by property trust certificates and cash
Originator/Entrustor: UBS Securities Japan Ltd.
Arranger: UBS Securities Japan Ltd.
UDMAC-J1 Trust, effected in September 2007, represents
the securitization of seven non-recourse loans.
The Originator entrusted the loans to the Asset Trustee and received the
Class A through G trust certificates, which were sold to investors.
The trust certificates are rated by Moody's.
In this transaction, any principal payments are applied sequentially
starting with the most senior class of the trust certificates.
Losses incurred by any defaulted loans are allocated in reverse sequential
order starting with the most subordinate class of the trust certificates.
Six loans were placed under special servicing in 2009 and recovered in
full in September 2010. The transaction is currently secured by
one loan (comprising 60.5% of the initial balance),
which is backed by two office buildings and one residential property located
in central Tokyo. The maturity of the loan was extended once to
the end of September 2010 and was again extended, for another three
months through the end of December 2010.
RATING RATIONALE
The current rating action reflects the following factors:
(1) Moody's is concerned about the recovery from the properties
when they are sold for the remaining loan, and has therefore re-assessed
its recovery stress assumptions, lowering them approximately 35%
from its initial assumptions.
(2) In light of Moody's re-assessment, losses on the
remaining loan balance of the loan are highly likely.
The principal methodology used in this rating was "Updated: Moody's
Approach to Rating CMBS Transactions in Japan" (June 2010) published on
September 30, 2010, and available on www.moodys.co.jp.
In this rating process, Moody's may have considered other factors.
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 did not receive or take into account any third party due diligence
reports on the underlying assets or financial instruments related to the
monitoring of this transaction in the past six months.
REGULATORY DISCLOSURES
For an explanation of the (sf) indicator, please see "Moody's Structured
Finance Rating Scale" on www.moodys.com.
The principal information used to prepare the credit rating included Trustee
Reports, Servicer Reports, Property Management Reports.
Information sources used to prepare the credit rating came the following:
parties involved in the ratings (such as the Arranger), parties
not involved in the ratings (such as the Servicer), public information,
confidential and proprietary Moody's information.
Measures taken to ensure the quality of this information include preparation
or reviews by a third party.
Moody's 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.
Credit ratings are Moody's current opinions of the relative future credit
risk of entities, credit commitments, or debt or debt-like
securities. Moody's defines credit risk as the risk that an entity
may not meet its contractual, financial obligations as they come
due and any estimated financial loss in the event of default. Credit
ratings do not address any other risk, including but not limited
to: liquidity risk, market value risk, or price volatility.
Credit ratings do not constitute investment or financial advice,
and credit ratings are not recommendations to purchase, sell,
or hold particular securities. No warranty, express or implied,
as to the accuracy, timeliness, completeness, merchantability
or fitness for any particular purpose of any such rating or other opinion
or information is given or made by Moody's in any form or manner whatsoever.
The credit risk of an issuer or its obligations is assessed based on information
received from the issuer or from public sources. Moody's may change
the rating when it deems necessary. Moody's may also withdraw the
rating due to insufficient information, or for other reasons.
Moody's Japan K.K. is a credit rating agency registered
with the Japan Financial Services Agency and its registration number is
FSA Commissioner (Ratings) No. 2. The Financial Services
Agency has not imposed any supervisory measures on Moody's Japan K.K.
in the past year.
Please see ratings tab on the issuer/entity page on the Moody's website
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 Credit Ratings were fully digitized and accurate
data may not be available. Consequently, Moody's 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 the Moody's website for further information.
Please see the Credit Policy page on the Moody's website for the methodologies
used in determining ratings, further information on the meaning
of each rating category and the definition of default and recovery.
Tokyo
Meishuku Ohno
Analyst
Structured Finance Group
Moody's Japan K.K.
JOURNALISTS: (03) 5408-4110
SUBSCRIBERS: (03) 5408-4100
Tokyo
Koji Kumamaru
MD - Structured Finance
Structured Finance Group
Moody's Japan K.K.
JOURNALISTS: (03) 5408-4110
SUBSCRIBERS: (03) 5408-4100
Moody's Japan K.K.
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Tokyo 105-6220
Japan
JOURNALISTS: (03) 5408-4110
SUBSCRIBERS: (03) 5408-4100
Moody's downgrades 4 classes of UDMAC-J1 (CMBS)