DBRS Confirms the Ratings of Merrill Lynch Financial Assets Inc., Series 2004-Canada 12

DBRS has today confirmed the ratings of all classes of Merrill Lynch Financial Assets Inc., Commercial Mortgage Pass-Through Certificates, Series 2004-Canada 12 as follows:

-- Class A-1 at AAA
-- Class A-2 at AAA
-- Class B at AAA
-- Class C at AA
-- Class D-1 at A
-- Class D-2 at A
-- Class E at BBB (high)
-- Class F at BBB (low)
-- Class G at BB (high)
-- Class H at BB
-- Class J at B (high)
-- Class K at B
-- Class L at B (low)
-- Class XP-1 at AAA
-- Class XP-2 at AAA
-- Class XC-1 at AAA
-- Class XC-2 at AAA

DBRS does not rate the CDN $7.6 million first-loss piece, Class M. All trends are Stable.

The ratings confirmations are reflective of the continued stable financial performance, paydown and subsequent increased credit enhancement. Of the original 76 loans from issuance, 44 loans remain in the pool, all of which are current. There are no loans in special servicing, and five loans, representing approximately 21% of the current pool balance, are on the servicer’s watchlist. There is one loan on the DBRS HotList, Commerce Street Industrial, because of significant vacancy issues and its upcoming loan maturity in October 2010. Four loans have fully defeased, representing 9.7% of the current pool balance. Additionally, the transaction benefits from a WADSCR of 1.52x.

DBRS conducted an in-depth analysis of the top ten loans of the transaction, in addition to the loans on the servicer’s watchlist. Cumulatively, these loans represent approximately 64% of the current pool balance. DBRS has applied cash flow stresses of 10% to 15% across the transaction and based on the increased credit enhancement levels across the transaction compared with the DBRS required credit enhancement levels in our stressed scenario, DBRS has confirmed all ratings.

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

The applicable methodologies are CMBS Rating Methodology and CMBS Surveillance, which can be found on our website under Methodologies.

This is a Structured Finance CMBS rating.