Fitch Upgrades 1 Class of FUNB 2001-C3
KEY RATING DRIVERS
The upgrade is due to stable performance of the remaining collateral since the last rating action and pending defeasance. Fitch modeled losses of 26.5% of the remaining pool; expected losses on the original pool balance total 4.2%, including \$29.6 million (3.6% of the original pool balance) in realized losses to date. There are seven assets remaining in the pool, one of which is REO (29.1% of the pool) and one is defeased (22%). An additional loan (8.6%) is expected to defease.
As of the December 2014 distribution date, the pool's aggregate principal balance has been reduced by 97.9% to \$17.6 million from \$818.8 million at issuance. Interest shortfalls are currently affecting classes M through P. At the previous rating action, there were two specially serviced assets, one liquidated at better than expected recoveries.
The REO asset is a 103,665 square foot (sf) suburban office property located in Wheaton, IL within the Chicago MSA. The loan was transferred to special servicing in 2010 due to imminent default and matured in 2011. The subject became REO as of October 2012. Occupancy was 44.6% as of October 2014 and the special servicer is currently evaluating disposition options.
RATING SENSITIVITIES
The ratings of classes K and L are expected to remain stable. Although credit enhancement is high for class L, upgrades are not warranted as concerns regarding pool concentration and potential losses from the remaining specially-serviced loan persist. There is also a concentration of non-defeased, non-specially serviced assets that are single-tenant CVS locations. The distressed class M may be subject to further downgrades as losses are realized.
Fitch upgrades the following class as indicated:
--\$4.2 million class K to 'Asf' from 'BBBsf'; Outlook Stable.
Fitch affirms the following classes as indicated:
--\$6.1 million class L at 'BBsf'; Outlook Stable;
--\$4.1 million class M at 'CCCsf'; RE 100%;
--\$3.2 million class N at 'Dsf'; RE 0%;
--\$0 class O at 'Dsf'; RE 0%.
The class A-1, A-2, A-3, B, C, D, E, F, G, H and J, and interest-only class IO-II certificates have paid in full. Fitch does not rate the class P certificates. Fitch previously withdrew the rating on the interest-only class IO-I certificates.
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