2008-08-26 23:45:01 -
- Fitch Ratings upgrades the following classes of Lehman Brothers-UBS Commercial Mortgage Trust Commercial Mortgage 2001-C3 pass-through certificates:
--$44.7 million class C to 'AAA' from 'AA+';
--$16.0 million class D to 'AAA' from 'AA';
--$18.0 million class E to 'AA-' from 'A+';
--$18.0 million class F to 'A+' from 'A';
--$12.1 million class G to
'A' from 'A-'.
In addition, Fitch affirms the following classes:
--$50.6 million class A-1 at 'AAA';
--$781.0 million class A-2 at 'AAA';
--Interest-only class X at 'AAA'.
--$55.2 million class B at 'AAA'.
Fitch does not rate the following classes:
--$15.5 million class H;
--$20.7 million class J;
--$6.9 million class K;
--$10.4 million class L;
--$3.5 million class M;
--$6.9 million class N;
--$3.5 million class P;
--$8.7 million class Q.
The upgrades reflect increased credit enhancement due to the repayment of four loans and scheduled amortization (2.8%), in addition to the defeasance of the largest loan in the pool (15.7%) since the last Fitch rating action. As of the August 2008 distribution date, the pool has paid down 22.4% to $1.07 billion, from $1.38 billion at issuance. Twenty-seven loans (38.3%), including four of the top 10 loans (24.4%), have defeased.
At issuance, there were five shadow rated loans. The largest shadow rated loan, the Chrysler Building (15.7%), defeased subsequent to Fitch's last rating action, while another, Shoppingtown Mall (3.8%), no longer maintains an investment-grade shadow rating. Fitch has reviewed the performance of the three remaining non-defeased shadow rated loans, which comprise 22.2% of the pool: Cape Cod Mall (8.5%), Vista Ridge Mall (7.6%), and Westlake Center (6.1%). All have had stable or improved performance since issuance.
There are currently two assets (0.6%) in special servicing. The larger specially serviced loan (0.3%) is secured by a 252-unit multifamily property located in Memphis, TN, and was transferred Dec. 13, 2007. Foreclosure proceedings have commenced; however, title complications relating to a drainage easement exist. The second largest specially serviced asset (0.2%) is secured by a multifamily property located in Plano, TX. The asset has been REO since April 1, 2008, and was listed for sale. A sales contract has been executed, with a 21-day feasibility period expiring Sept. 2, 2008. Fitch anticipates that losses relating to both assets will be absorbed by the unrated class Q.
Fitch has identified 10 loans (9.0%) as Fitch Loans of Concern. These include loans with debt service coverage ratios (DSCRs) below 1.0 times (x), loans with Fitch stressed loan-to-value ratios (LTVs) of greater than 100%, and loans with other performance issues.
No non-defeased loans are scheduled to mature in 2008 or 2009. The next scheduled maturities come in 2010, when one loan (0.1%) matures and two loans (4.8%) have anticipated repayment dates. These loans have a weighted-average interest rate of 8.05%, a weighted-average servicer-reported DSCR of 1.35x, and a weighted-average Fitch stressed LTV of 76.1%.
Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.
Fitch Ratings
Lindsay Weichert, +1-212-908-0398 (New York)
Britt Johnson, +1-312-606-2341 (Chicago)
Media Relations
Sandro Scenga, +1-212-908-0278 (New York)
