Fitch downgrades distressed classes in two U.S. CMBS deals, withdraws seven Wachovia trust ratings
Losses tied to troubled commercial mortgage-backed securities are prompting further rating pressure in parts of the U.S. CMBS market. Fitch Ratings says eight classes in two transactions are cut to 'Dsf' from 'Csf', while seven 'Dsf'-rated classes in Wachovia Bank Commercial Mortgage Trust 2005-C21 are withdrawn after their balances fall to zero.
Highlights
- Fitch downgrades eight classes to 'Dsf' from 'Csf' in DBUBS 2011-LC3 and COMM 2018-COR3 due to realized principal losses.
- In DBUBS 2011-LC3, Providence Place Mall resolved for a $130.5 million loss (42.9%), and in COMM 2018-COR3, Kingswood Center disposed with a $46.7 million loss (71.3%).
- Fitch withdraws ratings on seven 'Dsf'-rated classes in Wachovia Bank Commercial Mortgage Trust 2005-C21, citing zero balances and no remaining collateral.
Downgrades tied to realized collateral losses
As reported by Fitch Ratings, the rating agency downgrades eight distressed classes to 'Dsf' from 'Csf' because of realized losses in two U.S. CMBS transactions.The affected classes are in DBUBS 2011-LC3, classes PM-X, PM-1, PM-2, PM-3, PM-4 and PM-5, and COMM 2018-COR3, classes F-RR and G-RR. Fitch says class PM-X is downgraded because its reference class has experienced realized losses.
In DBUBS 2011-LC3, Providence Place Mall is resolved for a $130.5 million loss, equivalent to 42.9%. In COMM 2018-COR3, Kingswood Center is disposed of with a $46.7 million loss, or 71.3%.
Withdrawals and transaction status
Fitch also withdraws ratings on seven 'Dsf'-rated classes in Wachovia Bank Commercial Mortgage Trust 2005-C21. The agency says those classes have zero balances and the transaction has no remaining collateral.Today's actions are limited to the eight downgraded classes and the seven withdrawn classes. Fitch says any remaining bonds in the transactions are not analyzed as part of this review, and negative rating sensitivities do not apply to the downgraded classes because they already carry 'Dsf' ratings following realized principal losses, including the interest-only class PM-X.
Fitch’s rating on Hainan Rubber’s proposed subordinated perpetual securities outlined how instrument subordination and coupon-deferral features drive a rating two notches below the issuer level. Our earlier coverage also detailed Fitch’s view of the group’s leverage and liquidity profile, including its reliance on funding access and state support assumptions as key credit considerations.
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