S&P: Various Rating Actions Taken On LB-UBS Commercial Mortgage Trust 2005-C7
Our rating actions follow our analysis of the transaction, primarily using ourcriteria for rating U. S. and Canadian CMBS transactions, which included a review of the credit characteristics and performance of the remaining loans inthe pool, the transaction's structure, and the liquidity available to the trust.
We raised our ratings on classes D, E, and F to reflect our expectation of theavailable credit enhancement for these classes, which we believe is greater than our most recent estimate of necessary credit enhancement for the respective rating levels. The upgrades also follow our views regarding the collateral's current and future performance and reduced trust balance.
While available credit enhancement levels suggest further positive rating movements on classes E and F, our analysis also considered the concentration of loans secured by retail properties ($50.8 million or 65.1%) and geographic concentration in Texas ($30.6 million, 39.2%).
The affirmations on the nonpooled SP classes reflect our analysis of the Station Place I loan, which is the sole cash flow source for these raked certificates. Our analysis considered the property's stable operating performance as well as market sale comparable data. Based on our analysis, ourexpected-case value yielded a S&P Global Ratings loan-to-value (LTV) ratio of 71.5% on the whole-loan balance.
As of the July 15, 2016, trustee remittance report, the collateral pool balance was $78.0 million, which is 3.3% of the pool balance at issuance. The pool currently includes six loans, down from 135 loans at issuance. There are no defeased loans and no loans are with the special servicer or on the master servicer's watchlist. The master servicer, Wells Fargo Bank N. A., reported year-end 2015 financial information for 100.0% of the loans in the pool.
We calculated a 0.90x S&P Global Ratings weighted average debt service coverage (DSC) and 70.8% S&P Global Ratings weighted average LTV ratio using a7.07% S&P Global Ratings weighted average capitalization rate.
To date, the transaction has experienced $128.9 million in principal losses, or 5.5% of the original pool trust balance.
The nonpooled SP raked certificates are solely backed by the Station Place I loan. The loan is secured by an 11-story, 707,483-sq.-ft. office building in Washington, D. C., that is 99.6% leased to the U. S. Securities and Exchange Commission through April 2019. As of the July 15, 2016, trustee remittance report, the loan has a whole-loan balance of $200.3 million that consists of a$137.3 million senior nontrust component and a $63.0 million subordinate non-pooled trust component, down from a whole-loan balance of $244.7 million at issuance. The $63.0 million subordinate component supports the nonpooled SPcertificate classes. A senior pooled portion that had an original trust balance of $40.6 million (pari passu with the senior nontrust component) was fully amortized by October 2015, while the SP raked certificates receive no principal amortization until they mature in September 2025.