OREANDA-NEWS. Fitch Ratings has affirmed 22 classes of Merrill Lynch Mortgage Trust (MLMT) series 2008-C1, commercial mortgage pass-through certificates. A detailed list of rating actions follows at the end of this press release.

KEY RATING DRIVERS

The affirmations are the result of stable performance of the underlying collateral and continued paydown of the pool.

Fitch modeled losses of 7.4% of the remaining pool; expected losses on the original pool balance total 6.9%, including \$28.2 million (3% of the original pool balance) in realized losses to date. Fitch has designated 19 loans (36.8%) as Fitch Loans of Concern, which includes three specially serviced assets (2.4%).

As of the February 2015 distribution date, the pool's aggregate principal balance has been reduced by 46.2% to \$510.8 million from \$948.8 million at issuance. Per the servicer reporting, two loans (1.5% of the pool) are defeased. Interest shortfalls are currently affecting classes N through T.

The largest contributor to expected losses is the Fort Office Portfolio loan (9.5% of the pool), which is secured by three office buildings with an aggregate 340,708 square foot (sf) located in Phoenix, Houston and Omaha. As per the year-end 2014 rent rolls, the portfolio's occupancy declined to 83.7% from 100% after the second largest tenant vacated the Houston property in August 2014. The servicer-reported debt service coverage ratio (DSCR) had declined to 1.22x at year-end 2013 from 1.49x as of year-end 2012 due to the loans conversion to an amortizing loan. In addition, the portfolio's lease rollovers for 2016 and 2017 are 37.9% and 19.3%, respectively.

The next largest contributor to expected losses is the Townley Business Park loan (1.9%), which is secured by a 121,725 sf suburban office building located in Phoenix, AZ. The property's performance has been suffering from poor performance over the last several years as the occupancy has declined to 45.8% as of year-end 2014 from 74% as of year-end 2011. In December 2011 the loan converted from interest-only to amortizing; the servicer-reported DSCR declined to 0.69x as of year-end 2013 from 1.69x as of year-end 2011. The servicer reports the borrower has been unresponsive to leasing updates on the property.

The third largest contributor to expected losses is the Heritage Financial Center loan (2.1%), which is secured by a 61,163 sf office building located in Agoura Hills, CA, in northwest Los Angeles County. The loan was previously with the special servicer for monetary default in 2012. The loan was brought current on payments and a modification was given for a 12-month extension of interest-only payments that expired in June 2013. The servicer-reported occupancy was 72% as of year-end 2014 and the DSCR was 1.15x as of year-end 2013.

RATING SENSITIVITIES

The Rating Outlooks on classes A-4 through H are Stable due to increasing credit enhancement and continued paydown. Rating Outlooks on classes A-J through AJ-AF have been revised to Stable from Positive due to the adverse selection of the remaining collateral which are concentrated in secondary and tertiary markets. Additionally, there is a potential for special servicing transfers within the top 15 loans of the pool due to declining occupancy issues and tenant lease rollover risk.
Fitch affirms the following classes, revises Rating Outlooks and assigns REs as indicated:

--\$239.6 million class A4 at 'AAAsf'; Outlook Stable;
--\$40.3 million class A-1A at 'AAAsf'; Outlook Stable;
--\$71.2 million class AM at 'AAAsf'; Outlook Stable;
--\$6.3 million class AM-A at 'AAAsf'; Outlook Stable;
--\$41.8 million class AJ at 'AAsf'; Outlook to Stable from Positive;
--\$3.7 million class AJ-A at 'AAsf'; Outlook to Stable from Positive;
--\$2.2 million class AJ-AF at 'AAsf'; Outlook to Stable from Positive;
--\$10.7 million class B at 'Asf'; Outlook Stable;
--\$11.9 million class C at 'Asf'; Outlook Stable;
--\$8.3 million class D at 'BBBsf'; Outlook Stable;
--\$8.3 million class E at 'BBB-sf'; Outlook Stable;
--\$9.5 million class F at 'BBsf'; Outlook Stable;
--\$9.5 million class G at 'BBsf'; Outlook Stable;
--\$10.7 million class H at 'Bsf'; Outlook Stable;
--\$11.9 million class J at 'CCCsf'; RE 30%;
--\$10.7 million class K at 'CCsf'; RE 0%;
--\$8.3 million class L at 'Csf'; RE 0%;
--\$3.6 million class M at 'Csf'; RE 0%;
--\$2.7 million class N at 'Dsf'; RE 0%;
--\$0 class P at 'Dsf'; RE 0%;
--\$0 class Q at 'Dsf'; RE 0%;
--\$0 class S at 'Dsf'; RE 0%.

The class A-1, A-2, A-3, A-SB, A-1AF and AM-AF certificates have paid in full. Fitch does not rate the class T certificates. Fitch previously withdrew the rating on the interest-only class X certificates.

Additional information on Fitch's criteria for analyzing U.S. CMBS transactions is available in the Dec. 10, 2014 report, 'U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria', which is available at 'www.fitchratings.com' under the following headers:

Structured Finance >> CMBS >> Criteria Reports