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TEXT-S&P takes rating actions on BofA Large Loan Trust 2007-BMB1
April 5, 2012 / 8:17 PM / 6 years ago

TEXT-S&P takes rating actions on BofA Large Loan Trust 2007-BMB1

April 5 - OVERVIEW	
     -- We lowered our ratings on three classes from Banc of America Large 	
Loan Trust 2007-BMB1, a U.S. CMBS transaction.	
     -- Concurrently, we raised our ratings on two classes and affirmed our 	
ratings on eight classes from the same transaction.	
     -- The rating actions follow our revaluation of the collateral securing 	
seven of the remaining eight floating-rate loans, two of which are currently 	
with the special servicer. Our review also considered the deal structure, the 	
liquidity available to the trust, and refinancing risk.	
    	
     April 5 - Standard & Poor's Ratings Services today lowered its ratings on
three classes of commercial mortgage pass-through certificates from Banc of
America Large Loan Trust 2007-BMB1, a U.S. commercial mortgage-backed securities
(CMBS) transaction. In addition, we raised our ratings on two classes and
affirmed our ratings on eight classes from the same transaction (see list).	
	
The rating actions follow our analysis of the transaction. Our analysis 	
included our revaluation of seven of the remaining eight floating-rate loans, 	
two of which are currently with the special servicer. The master servicer, 	
Bank of America N.A. (BofA), indicated that the remaining loan, the OSI 	
Restaurant Portfolio loan was paid off in full subsequent to the March 2012 	
trustee remittance report. We also considered the deal structure, the 	
liquidity available to the trust, and the refinancing risk associated with two 	
performing loans ($112.3 million, 9.5% of the pooled trust balance) that are 	
scheduled to mature in May 2012 (details below). 	
	
The downgrades reflect credit support erosion that we anticipate will occur 	
upon the eventual resolution of the specially serviced Simply Self Storage 	
Portfolio loan ($33.4 million, 2.8%) and the classes' susceptibility to 	
interest shortfalls in the future if the remaining loans in the pool incur 	
additional trust expenses.  	
	
We upgraded classes A-2 and A-1A to 'AA+ (sf)' to reflect increased credit 	
support levels due to deleveraging of the pool after the third-largest loan in 	
the pool, the OSI Restaurant Portfolio loan, was paid off in full on March 27, 	
2012, subsequent to the March 2012 trustee remittance report. This loan had a 	
trust balance of $233.1 million (19.6% of the pooled trust balance) and a 	
whole-loan balance of $466.3 million.  	
	
The affirmed ratings on the principal and interest certificates reflect 	
subordination and liquidity support levels that are consistent with the 	
outstanding ratings. We affirmed our 'AAA (sf)' rating on the class X 	
interest-only (IO) certificates based on our current criteria. 	
	
As of the March 15, 2012, trustee remittance report, the trust consists of 	
eight floating-rate loans indexed to one-month LIBOR with a pooled trust 	
balance of $1.19 billion and a trust balance of $1.26 billion. The one-month 	
LIBOR was 0.248% per the March 2012 trustee remittance report. 	
	
LODGING COLLATERAL	
	
Lodging properties secure four loans totaling $304.0 million (25.6% of the 	
pooled trust balance), one of which is currently with the special servicer, 	
C-III Asset Management LLC (C-III). We based our analysis, in part, on a 	
review of the borrowers' operating statements for year-end 2011 and 2010, the 	
borrowers' 2012 budgets, and Smith Travel Research (STR) reports. Details on 	
the four lodging loans are as follows:	
	
The Blackstone Hawaii Hotel Portfolio loan, the largest lodging loan, is the 	
fourth-largest loan in the pool. The loan has a whole-loan balance of $238.7 	
million that comprises a $115.7 million senior note (9.7% of the pooled trust 	
balance) and two subordinate notes totaling $123.0 million held outside the 	
trust. The loan is secured by two full-service Marriott flagged luxury resort 	
hotels totaling 1,101 rooms in Wailea and Waikoloa, Hawaii. The master 	
servicer reported a combined in-trust debt service coverage (DSC) for the 	
portfolio of 15.94x, occupancy of 76.0%, and an average daily rate (ADR) of 	
$213.31 for year-end 2011. Our adjusted valuation, using a weighted average 	
capitalization rate of 10.30%, yielded an in-trust stressed loan-to-value 	
(LTV) ratio of 58.4%. According to the master servicer, as part of a June 8, 	
2009, loan modification, the loan's maturity was extended to June 8, 2010, 	
with three 12-month extension options and the workout and special servicing 	
fees for the loan were paid by the borrower. The loan is currently scheduled 	
to mature on June 8, 2012, and has one 12-month extension option remaining.	
	
The MSREF Resort Portfolio loan, the fifth-largest loan in the pool, has a 	
whole-loan balance of $729.9 million that consists of a $545.0 million senior 	
participation interest and two nontrust junior participation interests 	
totaling $184.9 million. In addition, the equity interests in the borrower of 	
the whole loan secure four mezzanine loans totaling $265.4 million held 	
outside the trust. The senior participation interest is further split into 	
three pari passu pieces, $81.8 million of which makes up 6.9% of the pooled 	
trust balance. The $381.5 million A-1 note is in Morgan Stanley Capital I 	
Inc.'s series 2007-XLF9 and the $81.7 million A-2 note is in UBS Commercial 	
Mortgage Trust 2007-FL1. The loan is secured by three full-service hotels 	
totaling 2,532 rooms in Orlando, Fla., and Phoenix, Ariz. BofA reported an 	
overall in-trust DSC for the portfolio of 5.98x for year-end 2010, occupancy 	
of 69.3%, and ADR of $198.84 for year-end 2011. Our adjusted valuation, using 	
a 10.50% capitalization rate yielded an in-trust stressed LTV ratio of 110.9%. 	
The loan matures on May 9, 2012. BofA indicated that the borrower is 	
considering refinancing and other options. 	
	
The Larkspur Landing Portfolio loan, the sixth-largest loan in the pool, has a 	
trust and whole-loan balance of $76.0 million (6.4%). In addition, the equity 	
interests in the borrower of the whole loan secure two mezzanine loans 	
totaling $99.7 million held outside the trust. The loan is secured by 11 	
extended-stay hotels totaling 1,278 rooms in California, Oregon, and 	
Washington. BofA reported an overall in-trust DSC for the portfolio of 21.21x, 	
occupancy of 75.3%, and ADR of $98.08 for year-end 2011. Our adjusted 	
valuation, using an 11.50% capitalization rate, yielded an in-trust stressed 	
LTV ratio of 71.3%. BofA notified us that the loan was recently transferred to 	
C-III on April 2, 2012, due to imminent default. The loan matures on July 11, 	
2012. 	
	
The TownePlace Suites Portfolio loan, the smallest loan in the pool, has a 	
trust balance of $30.5 million (2.6%) and a whole-loan balance of $59.0 	
million. The loan is secured by seven extended-stay hotels totaling 783 rooms 	
in Denver and Colorado Springs, Colo. BofA reported a combined in-trust DSC 	
for the portfolio of 18.87x, occupancy of 73.7%, and ADR of $76.40 for 	
year-end 2011. Our adjusted valuation, using an 11.63% capitalization rate, 	
yielded an in-trust stressed LTV ratio of 72.9%. The loan matures on May 6, 	
2012. BofA stated that the borrower is considering refinancing and other 	
options.RELATED CRITERIA AND RESEARCH	
 	
     -- Methodology And Assumptions For Rating U.S. And Canadian Stand-Alone 	
And Large Loan CMBS Transactions, published March 8, 2012.	
     -- Global Structured Finance Scenario And Sensitivity Analysis: The 	
Effects Of The Top Five Macroeconomic Factors, published Nov. 4, 2011. 	
     -- Methodology And Assumptions For Analyzing The Major Property Types In 	
U.S. CMBS Transactions, published June 14, 2010. 	
     -- Methodology And Assumptions: Capitalization Rates For Major Property 	
Types In U.S. CMBS Transactions, published June 14, 2010.	
     -- Global Methodology For Rating Interest-Only Securities, published 	
April 15, 2010.	
     -- U.S. CMBS Legal And Structured Finance Criteria: Property-Specific And 	
Large Loan Transactions, published May 1, 2003.	
 	
RATINGS LOWERED	
	
Banc of America Large Loan Trust 2007-BMB1	
Commercial mortgage pass-through certificates	
             Rating	
Class     To         From       Credit enhancement %	
H         B- (sf)    BB- (sf)                   7.45	
J         CCC+ (sf)  B- (sf)                    4.90	
K         CCC- (sf)  CCC (sf)                   2.36	
	
RATINGS RAISED	
	
Banc of America Large Loan Trust 2007-BMB1	
Commercial mortgage pass-through certificates	
             Rating	
Class     To         From       Credit enhancement %	
A-2       AA+ (sf)   AA (sf)                   27.80	
A-1A      AA+ (sf)   AA (sf)                   27.80	
	
	
RATINGS AFFIRMED	
	
Banc of America Large Loan Trust 2007-BMB1	
Commercial mortgage pass-through certificates	
Class     Rating       Credit enhancement %	
A-1       AAA (sf)                    56.98	
B         A+ (sf)                     24.17	
C         A- (sf)                     20.53	
D         BBB (sf)                    17.62	
E         BBB- (sf)                   15.08	
F         BB+ (sf)                    12.53	
G         BB (sf)                      9.99	
X         AAA (sf)                      N/A	
	
N/A--Not applicable.

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