DBRS Upgrades the Ratings of Two Classes and Confirms One Class of Merrill Lynch Mortgage Loans, Inc., Series 1998-Canada 1

DBRS has today upgraded the ratings of Merrill Lynch Mortgages Loans Inc. Commercial Mortgage Pass-Through Certificates, Series 1998-Canada 1 as follows:

Class E to AA from BBB (low)
Class F to A from BB

In addition, DBRS has confirmed the rating of Class X at AAA.

As of the September 2010 reporting period, four loans remain in the pool. Three of the four loans are fully amortizing and two loans are in special servicing.

The Chelmsford Plaza loan (13.5% of the pool) is a 36,044 retail centre in Chelmsford, Ontario and transferred to the special servicer in July 2009 for maturity default. DBRS has confirmed with the special servicer that the property is fully occupied and the borrower is in discussions to pay off the loan.

The Point Inn (11.91% of the pool) is a 150-key hotel in Calgary with a loan per key of $14,500. The loan transferred to the special servicer in February 2008 due to litigation at the borrower level. The loan has been brought current and benefits from the low leverage point, on a per square foot basis.

Additionally, as of September 2010, the cumulative balance of the two loans in special servicing is $2,452,906, which is less than the current balance of the unrated Class G. DBRS does not rate Class G. The current balance of Class G is $4,734,237.

The remaining two loans are secured by a mixed-use building on the western edge of the Toronto CBD and a full-service hotel in Québec City, Québec.

Outside of the Chelmsford Plaza loan, the remaining loans in the pool do not mature until 2018 and 2020.

Credit enhancement to the remaining rated bond classes has increased substantially since issuance and is reflected in the ratings upgrades.

DBRS will continue to monitor this transaction on a monthly basis, with more information being available in our Global CMBS Monthly Surveillance Report.

Notes:
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.