Standard & Poor's Ratings Services has raised its investment grade ratings on three classes of commercial mortgage-backed securities from Banc of America Large Loan Inc.'s series 2009-FDG.
S&P upgraded class B to AA-plus (sf) from AA (sf), class C to A-plus (sf) from A (sf), and class D to BBB (sf) from BBB-minus (sf). The company also affirmed its top investment grade rating on the class A certificates from the same transaction.
The rating actions followed S&P’s analysis of the transaction primarily using its current
Based, in part, on a review of the borrower's operating statements for the years ended 2012, 2011 and 2010, as well as the borrower's 2013 budgets and the Dec. 31, 2012, rent rolls; S&P used these to derive sustainable in place net cash flow for the assets, then divided this by a weighted average capitalization rate of 8.27% to determine its expected-case value. This yielded a loan-to-value ratio of 53.1% on the nondefeased whole-loan balance.
The collateral in this transaction includes: a single, fixed-rate nonrecourse first mortgage secured by the borrower's fee interest in 37 office and industrial properties totaling 4.4 million square feet in Miami, Orlando, Jacksonville, and Fort Lauderdale metropolitan statistical areas; the borrower's easement interests in a right of way along a 351-mile railway corridor extending from Jacksonville to Miami; the borrower's fee interest in 23 parcels adjacent to the railway corridor and a collateral assignment of the borrower's interest in the leases, rents and licenses associated with such parcels; and a collateral assignment of the borrower's interest in rents payable under leases and licenses encumbering five additional parcels adjacent to such railway corridor.
In addition, seven properties were replaced with U.S. Treasury and agency securities collateral in April 2012. The corresponding defeased balance is currently $55.9 million. Standard & Poor's has recently received a rating agency confirmation request from the master servicer, Bank of America NA, for an additional partial defeasance involving five properties, totaling $51 million, which S&P considered in its analysis.
As of the Feb. 25 trustee remittance report, the fixed-rate mortgage loan in the trust had a balance of $441 million, which includes a defeased balance of $55.9 million. The mortgage loan is divided into four components (A, B, C and D) which, in addition to the defeased balance, correspond to each class of principal certificates. The mortgage loan amortizes on a 30-year schedule and principal payments are applied in sequential order. Each component of the mortgage pays a different interest rate, with a weighted average rate of 6% per year, excluding the current defeased balance. B of A recorded debt service coverage of 2.11x on the whole-loan balance for the nine months ended Sept. 30, 2012. The loan's final maturity date is Jan. 25, 2017.
