S&P: Schooner Trust Series 2006-6 Rating Raised On One Class; Two 'AAA (sf)' Ratings Affirmed
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 rating on class C to reflect our expectation of the available credit enhancement for the class, which we believe is greater than our most recent estimate of necessary credit enhancement for the respective rating level. The upgrade also reflects our views regarding the current and future performance of the transaction's collateral and significant reduction in the trust balance, as well as our expectation that a majority of the remaining loans (eight; CAD$43.3 million, 82.8%) will pay off on their September 2016 maturity date.
The affirmations reflect our expectation that the available credit enhancementfor these classes will remain within our estimate of the necessary credit enhancement required for the current ratings and our views regarding the current and future performance of the transaction's collateral.
As of the Aug. 12, 2016, trustee remittance report, the collateral pool balance was CAD$52.3 million, which is 14.7% of the pool balance at issuance. The pool currently includes 11 loans, down from 98 loans at issuance. No loansare currently with the special servicer, First National Financial L. P., three (CAD$12.9 million, 24.6%) are defeased, and 11 (CAD$52.3 million, 100%) are onthe master servicer's watchlist. All of the watchlist loans are on the list because of their near-term maturity, although three of these loans are defeased. The master servicer, also First National Financial L. P., reported year-end 2015 financial information for 100% of the nondefeased loans in the pool. The master servicer said that eight of these loans were paid off in fullfollowing the August 2016 trustee remittance report.
Excluding the eight aforementioned loans, we calculated a 1.03x S&P Global Ratings' weighted average debt service coverage and 80.9% S&P Global Ratings' weighted average loan-to-value ratio using a 8.04% S&P Global Ratings' weighted average capitalization rate for the three loans (CAD$9.0 million, or 17.2%) that we expect will remain outstanding following the September 2016 trustee remittance report.
To date, the transaction has not experienced any principal losses.