OREANDA-NEWS. Fitch Ratings has affirmed Rivoli - Pan Europe 1 Plc's floating-rate notes due 2018 as follows:

EUR37.3m Class B (XS0278739874) affirmed at 'Bsf'; Outlook revised to Stable from Negative
EUR23.6m Class C (XS0278741771) affirmed at 'CCCsf'; Recovery Estimate (RE) 50%, revised from 10%

The transaction is a 2006 securitisation of five loans secured by office, retail and industrial properties located in France, Spain and the Netherlands. Four loans have repaid in full, the most recent being the EUR52m Blue Yonder loan at the May 2015 interest payment date (IPD), with all proceeds applied sequentially leading to the class A notes being paid in full.

KEY RATING DRIVERS
The rating actions reflect higher-than-expected proceeds from the Blue Yonder loan. However, the improvement in credit quality is muted by rising uncertainty regarding the Rive Defense borrower's ability to refinance the loan, which is due in July. There has been a significant decline in value for an office that occupies an off-pitch location in Paris.

The EUR61m Rive Defense loan (a 50% syndication of a larger facility) remains in special servicing following the approval of a plan by the courts presiding over its previous safeguard proceedings. Part of this process saw Nanterre city council give planning permission for the demolition and redevelopment of the site, which could improve collateral value.

However, in June 2015 the property was revalued at only EUR102.6m, 44% down from EUR181.7m in 2013. The loan-to-value ratio has therefore increased to 118.9% from 68.4%. The sharp decline in value and the borrower's investment in securing planning permission both reflect uncertainty around the occupational demand for the office, a 47,346 sq. m. site north-west of La Defense. While 94% occupied, and having had the smaller of the two leases (22% of occupied area) recently extended until February 2016 by SFR/Vivendi (the sole tenant), Fitch expects the tenant to leave at the next expiry date in 2018. It is reportedly constructing a new headquarters in the city.

The borrower's ability to return capital to the issuer in time for bond maturity in 2018 will likely depend on securing a purchaser for the asset as a development opportunity. Fitch expects the loan to be resolved at a loss consistent with the RE on the class C notes.

RATING SENSITIVITIES
Fitch estimates 'Bsf' recoveries of EUR49m.

Long delays in resolving the loan, particularly if accompanied by more court intervention, will apply downwards pressure on the ratings.

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.
- Loan-by-loan data provided by Hatfield Philips as at 3 November 2015
- Transaction reporting provided by Credit Agricole as at 3 November 2015