Reuters: Financial Services and Real Estate: TEXT-Fitch affirms LB-UBS 2002-C7 senior classes

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TEXT-Fitch affirms LB-UBS 2002-C7 senior classes Jun 8th 2012, 19:36 Fri Jun 8, 2012 3:36pm EDT (The following statement was released by the rating agency) June 8 - Fitch Ratings has downgraded five classes of LB-UBS Commercial Mortgage, series 2002-C7, commercial mortgage pass-through certificates. A detailed list of rating actions follows at the end of this release. The downgrades are the result of an increase in Fitch expected losses on the specially serviced loans. Fitch modeled losses of 2.5% of the remaining pool; expected losses of the original pool are at 2.3%, including losses already incurred to date. Fitch has designated 13 loans (9%) as Fitch Loans of Concern, which include six specially serviced loans (3.3%). Fitch expects losses associated with the specially serviced assets to impact class T. As of the May 2012 distribution date, the pool's aggregate principal balance has been paid down by approximately 48% to $613 million from $1.19 billion at issuance. Twenty-nine loans representing 40% of the pool have defeased. Interest shortfalls are affecting classes P through U with cumulative unpaid interest totaling $1.1 million. The largest contributor to Fitch modeled losses (1.4%) is a 95,527 square feet (sf) retail center located in Houston, TX. The property became a real estate owned (REO) asset in June 2011 and was 46.8% occupied as of April 2012. The occupancy is expected to increase significantly when a newly signed lease for 22.2% of the property becomes effective in September 2012. Fitch expects losses upon liquidation of the asset based on recent property valuations obtained by the servicer. The second largest contributor to Fitch modeled losses (2.2%) is a 107,188 sf office property in San Diego, CA. The most recent servicer reported year-end (YE) 2011 debt service coverage ratio (DSCR) is 0.81 times (x). Occupancy at the property declined to 54% as of YE 2009 due to a large tenant (20,783 sf; 19% GLA) that left at lease expiration. Occupancy has since improved significantly due to the signing of new leases in 2010 and 2012. Based on the rent roll dated March 1, 2012, the property is 81.4% leased. Fitch has downgraded the following classes, revised ratings outlooks and revised/assigned Recovery estimates (RE) as indicated: --$7.4 million class M to 'BBB-sf' from BBBsf'; Outlook to Negative from Stable; --$5.9 million class N to 'BBsf' from 'BB+sf'; Outlook Negative; --$8.9 million class P to 'CCCsf' from 'Bsf'; RE 0%; --$4.5 million class Q to 'Csf' from 'CCsf; RE0%; --$3 million class S to 'Csf' from 'CCsf'; RE0%. Fitch has affirmed the following classes and revised ratings outlooks as indicated: --$357.2 million class A-4 at 'AAAsf'; Outlook Stable; --$56.4 million class A-1b at 'AAAsf'; Outlook Stable; --$20.8 million class B at 'AAAsf'; Outlook Stable; --$17.8 million class C at 'AAAsf'; Outlook Stable; --$17.8 million class D at 'AAAsf'; Outlook Stable; --$14.8 million class E at ''AAAsf'; Outlook Stable; --$14.8 million class F at 'AAAsf'; Outlook Stable; --$14.8 million class G at 'AAAsf'; Outlook Stable; --$19.3 million class H at 'AAAsf'; Outlook Stable; --$11.9 million class J at 'AA'sf ; Outlook to Stable from Positive; --$11.9 million class K at 'A+sf'; Outlook to Stable from Positive; --$19.3 million class L at 'BBB+sf; Outlook Stable; --$6.5 million class T at 'Dsf'; RE0%'. Fitch does not rate class U. Classes A-1, A-2 and A-3 have paid in full. Fitch has previously withdrawn the rating of the interest only classes X-CL and X-CP. Additional information on Fitch's criteria for analyzing U.S. CMBS transactions is available in the Dec. 21, 2011 report, 'Surveillance Methodology for U.S. Fixed-Rate CMBS Transactions', which is available at 'www.fitchratings.com' under the following headers: Structured Finance >> CMBS >> Criteria Reports Additional information is available at 'www.fitchratings.com'. The ratings above were solicited by, or on behalf of, the issuer, and therefore, Fitch has been compensated for the provision of the ratings. Applicable Criteria and Related Research: --'Global Structured Finance Rating Criteria' (Aug. 4, 2011); --'Surveillance Methodology for U.S. Fixed-Rate CMBS Transactions' (Dec. 21, 2011). Applicable Criteria and Related Research: Global Structured Finance Rating Criteria Surveillance Methodology for U.S. Fixed-Rate CMBS Transactions ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: here. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE '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. Criteria Regulatory Form NRSRO Terms Of Use Endorsement Policy Privacy Policy Code of Ethics Site Index Press Room Copyright © 2012 by Fitch, Inc., Fitch Ratings Ltd. and its subsidiaries. Home Ratings and Research Tools Products and Services Fitch Training (New York Ratings Team) Link this Share this Digg this Email Reprints

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