Fitch Downgrades 4 Classes of MLMT 2008-C1.
KEY RATING DRIVERS
The downgrades reflect a greater certainty of expected losses on the specially serviced assets since Fitch's last rating action. Fitch modeled losses of 28.7% of the remaining pool; expected losses on the original pool balance total 10.4%, including $36.6 million (3.9% of the original pool balance) in realized losses to date. Fitch has designated 11 loans (49%) as Fitch Loans of Concern, seven (34%) of which are specially serviced including the largest three loans in the transaction.
As of the November 2017 distribution date, the pool's aggregate principal balance has been reduced by 77.3% to $214.9 million from $948.8 million at issuance. There are four (5.3%) defeased loans. Interest shortfalls are currently affecting classes K through T.
High Fitch LOC/Specially serviced loans: Eleven loans (49%) are considered Fitch Loans of Concern of which seven are specially serviced (33.6%) and include the top three loans (25%) in the transaction, one of which is REO. This compares to three loans (4.7%) at Fitch's last rating action.
Increasing Pool Concentration/Adverse Selection: The transaction is becoming increasingly concentrated with 30 of the original 92 loans remaining in the transaction. The largest 10 loans in the transaction represent 59% of the pool balance. Additionally, retail properties located in tertiary markets comprise 39% of the pool.
Defeasance: Four loans representing 5.3% of the pool are defeased, of which three loans (3.6%) totaling $7.8 million have loan maturities in 2018 and one (1.7%) in 2023.
Maturity Concentration: Thirteen loans 40% mature in December 2017, of which nine loans (30%) are performing and four loans (10%) are in special servicing. Fourteen loans (43%) mature between January and March 2018, of which two loans (11.7%) are in special servicing. One loan (1.7%) matures in January 2023, and one loan (0.9%) matures in January 2027.
Hurricane Harvey Exposure: The largest loan (11%) which is in special servicing is located in Houston TX. Per the significant insurance event report provided by the master servicer, the properties sustained minor damage and no claims have been filed.
Amortization Type: Five loans (25.2% of the pool) are interest-only, and two loans (2.6% of the pool) are fully amortizing. Twelve loans (29% of the pool) are performing balloon loans. Eleven loans (43% of the pool) are partial IO.
The Negative Rating Outlooks for classes AM through E reflect uncertainty regarding timing of payoffs given the significant number of loans that mature in the next three months, as well as the ultimate recoveries on the specially serviced assets. Should additional loans default at maturity and transfer to special servicing or losses from the specially serviced assets are greater than expected downgrades are possible. Given the concentrations, upgrades are unlikely unless there is significant paydown and better than expected recoveries.
USE OF THIRD-PARTY DUE DILIGENCE PURSUANT TO SEC RULE 17G-10
No third-party due diligence was provided or reviewed in relation to this rating action.
Fitch has downgraded the following ratings:
--$9.5 million class F to 'CCCsf' from 'Bsf'; assigned RE 0%;
--$9.5 million class G to 'CCsf' from 'CCCsf'; RE revised to 0%;
--$10.7 million class H to 'CCsf' from 'CCCsf'; RE 0%;
--$11.9 million class J to 'Csf' from 'CCsf'; RE 0%.
Fitch has also affirmed the following ratings:
--$64.7 million class AM at 'AAAsf'; Outlook Negative;
--$5 million class AM-A at 'AAAsf'; Outlook Negative;
--$41.8 million class AJ at 'Asf'; Outlook Negative;
--$3.7 million class AJ-A at 'Asf'; Outlook Negative;
--$2.2 million class AJ-AF at 'Asf'; Outlook Negative;
--$10.7 million class B at 'Asf'; Outlook Negative;
--$11.9 million class C at 'BBBsf'; Outlook Negative;
--$8.3 million class D at 'BBBsf'; Outlook Negative;
--$8.3 million class E at 'BBsf'; Outlook Negative;
--$10.7 million class K at 'Csf'; RE 0%.
--$8.3 million class L at 'Dsf'; RE 0%;
--$1.3 million class M at 'Dsf'; RE 0%.
--$0 class N at 'Dsf'; RE 0%;
--$0 class P at 'Dsf'; RE 0%;
--$0 class Q at 'Dsf'; RE 0%;
--$0 class S at 'Dsf'; RE 0%.
The class A-1, A-2, A-3, A-4, A-SB, A-1AF and AM-AF certificates have paid in full. Fitch does not rate the class T certificates. Fitch previously withdrew the rating on the interest-only class X certificates.
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|Publication:||Daily the Pak Banker (Lahore, Pakistan)|
|Date:||Feb 13, 2018|
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