Fitch Affirms LB-UBS Series 2007-C2

2008-05-15 23:35:54 -

- Fitch Ratings has affirmed LB-UBS Commercial Mortgage Trust, series 2007-C2, commercial mortgage pass-through certificates:

--$22.4 million class A-1 at 'AAA';

--$447 million class A-2 at 'AAA';

--$78 million class A-AB at 'AAA';

--$1.3 billion class A-3 at 'AAA';

--$659.6 million class A-1A at 'AAA';

--$355.4 million class A-M at 'AAA';

--$315.5 million

class A-J at 'AAA';

--Interest only class X-CP at 'AAA';

--Interest only class X-W at 'AAA';

--Interest only class X-CL at 'AAA';

--$26.7 million class B at 'AA+';

--$53.3 million class C at 'AA';

--$40 million class D at 'AA-';

--$13.3 million class E at 'A+';

--$26.7 million class F at 'A';

--$35.5 million class G at 'A-';

--$31.1 million class H at 'BBB+';

--$35.5 million class J at 'BBB';

--$40 million class K at 'BBB-';

--$17.8 million class L at 'BB+';

--$8.9 million class M at 'BB';

--$4.4 million class N at 'BB-'.

The $8.9 million class P, $4.4 million class Q, $13.3 million class S and $35.5 class T are not rated by Fitch.

The ratings affirmations are the result of the transaction stabilizing since issuance. As of the April 2008 remittance, the transaction has paid down 0.1% to $3.551 billion from $3.554 billion at issuance.

Fitch has identified three loans of concern (1.3%), all of which are specially serviced. Expected losses would be absorbed by the non-rated class T. The largest specially serviced asset (0.7%) is an office property in Orlando, FL. The loan was transferred to special servicing due to monetary default.

The second largest specially serviced asset (0.4%) is a retail property located in Collier Township, PA. The property has suffered from a decline in occupancy and a tenant bankruptcy.

Fitch reviewed the most recent servicer provided operating statement analysis reports for the seven shadow rated loans (26.5%). Based on their stable performance, the loans maintain investment grade shadow ratings.

The largest shadow rated loan (11.3%) is secured by the Tishman Speyer DC Portfolio II which consists of over 2 million square feet (sf) of office space in Washington, D.C. and Northern Virginia. As of year-end (YE) 2007, occupancy at the properties has decreased to 83% from 93% at issuance, however, the servicer reported weighted-average debt service coverage ratio (DSCR) as of YE 2007 was 1.42 times (x). At origination, it was expected that approximately 40% of the leases will expire before 2010.

The second and third largest shadow rated loans (3.5% and 2.5%, respectively) are both secured by portfolios of Extendicare healthcare facilities in various states. The servicer reported weighted-average DSCR for both portfolios as of YE 2007 was 2.41x and 2.16x, respectively.

The largest non-shadow rated loan (10.4%) is secured by an interest in the Sears Tower office building in Chicago, IL. Occupancy as of YE 2007 was 78%, in-line with issuance.

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, New York
Jeffrey Diliberto, +1-212-908-9173
Adam Fox, +1-212-908-0869
Sandro Scenga, +1-212-908-0278 (Media Relations)