OREANDA-NEWS. Fitch Ratings has downgraded Indus (Eclipse 2007-1) plc's class C notes, as follows

GBP51.8m class C (XS0294757256) downgraded to "Dsf" from 'Csf'; Recovery Estimate (RE) 50%

The transaction was originally a securitisation of 19 commercial mortgage backed loans (six remaining), 18 of which were originated by Barclays Bank PLC (A/Stable/F1) and the remainder a senior tranche of a loan originated by Bank of Scotland. Fifteen loans have repaid since closing in 2007, with five resulting in a loss for the junior noteholders. The total loan balance has been reduced to GBP199m from GBP894m. The loans are currently secured against a portfolio of office, mixed-use and retail properties located in the UK.

KEY RATING DRIVERS

While the Workspace portfolio, which was in special servicing was sold at 94% of the last valuation, it resulted in a considerable loss on the loan. The loan was GBP25.8m, and recoveries were GBP8.3m with losses of GBP1m being assigned to the class C notes and GBP16.4m being assigned to the class D notes. This resulted in the class D notes being written down in full and the class C notes taking a loss.

RATING SENSITIVITIES
A further deterioration in the performance of the loans backed by secondary/tertiary assets is likely to have a detrimental effect on the junior notes' recovery prospects.