OREANDA-NEWS. Fitch Ratings has affirmed Tibet CMBS S.r.l., as follows:

EUR103.9m Class A (IT0005082927): affirmed at 'AAsf'; Outlook Stable
EUR26.7m Class B (IT0005082976): affirmed at 'Asf'; Outlook Stable
EUR9.9m Class C (IT0005082984): affirmed at 'A-sf'; Outlook Stable
EUR60.4m Class D (IT0005082992): affirmed at 'BBsf'; Outlook Stable

The CMBS transaction is secured by a single loan backed by a prime retail property in Milan.

KEY RATING DRIVERS
The affirmation reflects the stable performance of the underlying property, which as we expected has reported an improvement in net income and reduction in leverage since the transaction's closing a year ago.

The reported interest cover ratio (ICR) has increased to 1.51x, up from 1.37x at the date of issuance, driven by income growth as rental discounts roll off on some of the leases. The market value had risen to EUR320.9m in July 2015 compared with EUR314.7m reported in July 2014. Along with scheduled principal repayments of EUR2.1m, this has led to a decline in the reported LTV to 62.98%, from 64.50% at the issue date.

The property's location in Milan's luxury shopping district has supported strong demand for retail space, and we expect this to continue if any space becomes available in the short term. Prime rents in the area have risen sharply over the past 18 months, albeit on the back of relatively little turnover at this end of the market.

RATING SENSITIVITIES
A significant deterioration in the business model of luxury retailers that reduced their requirement for flagship space could result in a downgrade of the notes. If the Italian sovereign was downgraded, this could also affect the senior notes.

Fitch estimates 'Bsf' proceeds of EUR246m

DUE DILIGENCE USAGE
No third party due diligence was provided or reviewed in relation to this rating action.

DATA ADEQUACY
Fitch has checked the consistency and plausibility of the information it has received about the performance of the asset pool and the transaction. There were no findings that were material to this analysis. Fitch has not reviewed the results of any third party assessment of the asset portfolio information or conducted a review of origination files as part of its ongoing monitoring.

Fitch did not undertake a review of the information provided about the underlying asset pool ahead of the transaction's initial closing. The subsequent performance of the transaction over the years is consistent with the agency's expectations given the operating environment and Fitch is therefore satisfied that the asset pool information relied upon for its initial rating analysis was adequately reliable.

Overall, Fitch's assessment of the information relied upon for the agency's rating analysis according to its applicable rating methodologies indicates that it is adequately reliable.