Banc of America Large Loan Inc.'s commercial mortgage pass-through certificates, series 2001-7WTC -- secured by mortgage loans on a leasehold interest in 7 World Trade Center -- have been downgraded by Fitch Ratings.All classes in the deal remain on Rating Watch Negative. The downgrades were as follows: class A, from AAA to A; interest-only classes X-1 and X-2, from AAA to A; class B, from AA-plus to BBB-plus; class C, from AA to BBB; class D, from AA-minus to BBB-minus; class E, from A-plus to BB-plus; class F, from A to BB; class G, from BBB-plus to B-plus; and class H, from BBB to B. The certificates are secured by ownership in a trust that owns a $383 million loan backed by certificates secured by four mortgage loans to the underlying borrower on a leasehold interest in 7WTC. Fitch said the rating actions reflect the fact that "the credit characteristics of the underlying loan are now similar to that of a construction loan, a position for which the original ratings are inconsistent." It cited several contributing factors, including: the decline in net effective market rents; the smaller size of the building planned for construction; and the use of insurance proceeds to fund construction because other sources are not yet available.

Subscribe Now

Authoritative analysis and perspective for every segment of the mortgage industry

30-Day Free Trial

Authoritative analysis and perspective for every segment of the mortgage industry