OREANDA-NEWS. S&P Global Ratings has today lowered its credit ratings on the class A and B notes and affirmed its ratingson all other classes of notes in Ulysses (European Loan Conduit No. 27) PLC (see list below).

Today's rating actions follow our review of the underlying loan's credit quality, in light of the transaction's approaching legal final maturity date in July 2017.

Ulysses (European Loan Conduit No. 27) is a European commercial mortgage-backed securities (CMBS) transaction that closed in July 2007. At closing, the issuer acquired the senior portion of a U. K. loan secured by a single office building in London, which is known as CityPoint. The senior loanis interest-only and the current outstanding note balance is ?429 million (unchanged since closing). The final maturity date of the notes is in July 2017.

LOAN ANALYSIS

The loan entered special servicing on Feb. 14, 2012 following the borrower's failure to make sufficient payments to meet all of its obligations in respect of interest due on the whole loan. The special servicer subsequently appointeda receiver, which then entered into a new asset management agreement with the existing whole loan sponsor.

In October 2012, the receiver and the sponsor signed a ?21.7 million capital expenditure (capex) facility agreement to implement the new business plan for the asset. Asset management initiatives include refurbishment works to the entrance hall, the plaza, and to refurbish a retail unit.

The loan matured in July 2014 but there is a long-dated swap, which ranks ahead of the securitized loan, which matures in July 2017.

The property is currently 87.1% occupied, with an annual rental income of ?24.5 million. The weighted-average lease term is 5.6 years.

The reported market value as of December 2014 is ?498,500,000, representing a current securitized loan-to-value (LTV) ratio of 86.1%.

We have assumed principal losses on the loan in our 'B' rating stress scenario.

RATING RATIONALE

Our ratings in this transaction address the timely payment of interest, payable quarterly in arrears, and the payment of principal no later than the legal final maturity date in July 2017.

The transaction is approaching its legal final maturity date, which is now less than 12 months. The potential for a payment default at legal final maturity has increased, in our opinion. The class A notes face at least a one-in-three likelihood of default in our view. We have therefore lowered to 'CCC+ (sf)' from 'B+ (sf)' our rating on this class of notes in accordance with our "Criteria For Assigning 'CCC+', 'CCC', 'CCC-', And 'CC' Ratings," published on Oct. 1, 2012.

We have lowered to 'CCC - (sf)' from 'CCC (sf)' our rating on the class B notesbecause this class of notes remains vulnerable to non-payment and its credit characteristics are weaker than the class A notes. This is also in line with our criteria for assigning 'CCC' category ratings.

We have affirmed our 'D (sf)' ratings on the class C, D, and E notes followingtheir interest shortfalls. This is in line with our criteria "Timeliness Of Payments: Grace Periods, Guarantees, And Use Of 'D' And 'SD' Ratings," published on Oct 24, 2013.