OREANDA-NEWS. February 22, 2016. Fitch Ratings has downgraded four classes of Lehman Brothers-UBS (LB-UBS) Commercial Mortgage Trust commercial mortgage pass-through certificates, series 2001-C3. A detailed list of rating actions follows at the end of this press release.

KEY RATING DRIVERS

The downgrades reflect further increases in Fitch modeled losses on the remaining pool, particularly on the top two loans, Vista Ridge Mall and Park Central.

As of the January 2016 distribution date, the pool's aggregate principal balance has been reduced by 92.8% to \\$97 million from \\$1.38 billion at issuance; The pool has experienced \\$49.6 million (3.5% of the original pool balance) in realized losses to date. The pool has become extremely concentrated with only five of the original 169 loans remaining in the transaction, one of which (2.3%) is defeased, and three are specially serviced (95%). Interest shortfalls are currently affecting classes J through Q.

Vista Ridge Mall consists of approximately 380,000 sf of the in-line space of a 1.1 million sf mall in Lewisville, TX. The mall is anchored by non-collateral tenants Sears, Dillard's, Macy's and JCPenney as well as Cinemark Theater, which is part of the collateral. Vista Ridge Mall has experienced declining financial performance over the past few years due to competition from other stronger malls in the area. The total occupancy at the mall declined from 96.7% to 94.3% between year-end 2013 and year-end 2014,with the collateral portion of the propertyaccounting for the entire decline in occupancy. Debt Service Coverage Ratio (DSCR) at year-end 2014 was 0.81x compared with 0.92x at year-end 2013 and has not exceeded 1.20x since 2009. Despite declining DSCR, the loan is current as of the January 2016 remittance report.

While the Vista Ridge Mall loan (65.6% of the pool) is current, the borrower has expressed their belief that default is imminent. This loan accounts for 68.3% of the scheduled monthly interest for the pool.

Park Central is an approximately 337,000 sf office/retail property located in Phoenix, AZ. The property is a former mall, a portion of which is now being utilized as office space. The property became REO in May 2012. As of year-end 2015, occupancy was 42.9% after the largest tenant, Cable One (12.1% NRA), vacated its space at the beginning of December. The special servicer indicated it intends to lease the vacant space and is not marketing the property for sale at present.

RATING SENSITIVITIES

The Negative Outlooks reflect loan concentration and adverse selection of the remaining pool. Three out of the five remaining loans are currently in special servicing with no prospect for near term resolution and declining performance. Upgrades are not likely due to the concentrated nature of the pool.

Classes may be subject to further downgrades as additional losses are realized or if losses exceed Fitch's expectations.

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

Fitch downgrades the following classes and revises Outlooks as indicated:

--\\$16 million class D to 'BBBsf' from 'Asf'; Outlook to Negative from Stable.
--\\$18 million class E to 'BBsf' from 'BBBsf'; Outlook Negative;
--\\$18 million class F to 'CCsf' from 'BBsf'; RE 95%;
--\\$12.1 million class G to 'Csf' from 'CCsf'; RE 0%.

The class A-1, A-2, B, and C certificates have paid in full. Fitch does not rate the class H, J, K, L, M, N, P and Q certificates. Fitch previously withdrew the rating on the interest-only class X certificates.