OREANDA-NEWS. Fitch Ratings has downgraded DECO 6 - UK Large Loan 2 Plc's class A2 notes due 2017 and affirmed the others, as follows:

GBP29.4m class A2 (XS0235683223) downgraded to 'Csf' from 'CCsf'; Recovery Estimate (RE) 10%
GBP34.4m class B (XS0235683736) affirmed at 'Csf'; RE 0%
GBP39.3m class C (XS0235684114) affirmed to 'Csf'; RE 0%
GBP24.1m class D (XS0235684544) affirmed at 'Csf'; RE 0%

DECO 6 - UK Large Loan 2 plc was originally the securitisation of four commercial loans originated by Deutsche Bank AG (A/Stable/F1), which closed in December 2005. Two of the loans have since repaid in full and one resolved (pending a significant loss allocation to the class C and D). The remaining loan is secured on two UK office buildings.

KEY RATING DRIVERS
The downgrade of the class A2 notes reflects the inevitability of loss. The affirmation of the more junior tranches at 'Csf' reflects the unchanged expectation of a full write-down.

Since the last rating action in February 2015, the Brunel Shopping Centre has been sold and recovery amounts of GBP65m paid to the senior notes. Barring any late recoveries, the remaining loan balance of GBP34.4m will be written off, with the recovery rate in line with Fitch's expectations.

The only remaining loan, the GBP92.8m Mapeley loan, entered special servicing in 2011 as the result of an uncured interest coverage ratio breach and was accelerated in 2012. Since then, 18 of the 20 properties have been sold. A significant drop in property values driven by rising vacancy and weak demand for tertiary properties has caused the LTV to rise over time, reaching over 1,900% in January. The remaining two offices located in Edinburgh and Northampton are likely to be sold in time for bond maturity in July 2017, with net proceeds being applied against senior note principal. Fitch estimates around 10% of the current GBP29.4m balance will be recovered, with the remaining notes being written down.

Fitch estimates 'Bsf' recoveries of approximately GBP3m.

RATING SENSITIVITIES
All tranches will be downgraded to 'Dsf' once the inevitable losses from Brunel Shopping Centre and Mapeley have been determined and allocated to the notes.

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.

SOURCES OF INFORMATION
The information below was used in the analysis.
-Transaction reporting provided by Situs Asset Management as at October 2015
-Transaction reporting provided by Deutsche Bank AG as at October 2015/January 2016.