DBRS has today upgraded five classes of Solar Trust, Series 2002-1

DBRS has today upgraded five classes of Solar Trust, Series 2002-1 (STST 2002-1):

– Class C to AAA from AA (low)
– Class D to AA (low) from A (low)
– Class E to A from BBB
– Class F to BBB (low) from BB
– Class G to BB from BB (low)

DBRS has also confirmed the other classes in the transaction as follows:
– Class A-1 at AAA
– Class A-2 at AAA
– Class B at AAA
– Class H at B
– Class J at B (low)
– Class IO at AAA

DBRS does not rate the $4.0 million first-loss piece, Class K.

All trends for the rated classes of the transaction are Stable.

The upgrades are a result of amortization, defeasance and loan maturities and subsequent payoffs. The collateral has been reduced by approximately 30% of the issuance balance and the remaining collateral has exhibited strong performance, with a weighted-average debt service coverage ratio (WADSCR) of 1.72 times (x) as of the May 2010 reporting period. There are nine loans on the servicer's watchlist and seven loans on the DBRS HotList. All loans remain current and there are no loans scheduled to mature prior to September 2011. Additionally, the transaction benefits from 11 loans being fully defeased, representing 11% of the current pool balance.

The DBRS analysis included an in-depth look at the top ten loans in the transaction, in addition to the loans on the servicer’s watchlist. Cumulatively, these loans represent approximately 66% of the current pool balance. DBRS has run various cash flow stress scenarios where 20%, 10% and 5% cash flow stresses were applied across the entire transaction. As more loans report YE2009 financials, DBRS notes that these cash flow stresses are not exactly reflective of the actual cash flows the assets are generating, which is a positive sign for the transaction. However, in running these stressed scenarios and comparing the DBRS required credit enhancement levels with the current increased credit enhancement levels across the transaction, the rating upgrades are appropriate.

For further detail and loan level analysis, please refer to the corresponding Surveillance report on www.dbrs.com.

Notes:
All figures are in Canadian dollars unless otherwise noted.

The applicable methodology is CMBS Rating Methodology, which can be found on our website under Methodologies.

This is a Structured Finance rating.