DBRS Upgrades Seven Classes of Merrill Lynch Financial Assets Inc., Series 2004-Canada 14

DBRS has today upgraded seven classes of Merrill Lynch Financial Assets Inc., Commercial Mortgage Pass-Through Certificates, Series 2004-Canada 14 as follows:

Class B from AA to AA (high)
Class C from A to A (high)
Class D-1 from BBB to A (low)
Class D-2 from BBB to A (low)
Class E-1 from BBB (low) to BBB (high)
Class E-2 from BBB (low) to BBB (high)
Class F from BB (high) to BBB

In addition, DBRS has confirmed eleven classes as follows:

Class A-1 at AAA
Class A-2 at AAA
Class XP-1 at AAA
Class XP-2 at AAA
Class XC-1 at AAA
Class XC-2 at AAA
Class G at BB
Class H at BB (low)
Class J at B (high)
Class K at B
Class L at B (low)

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

DBRS does not rate the $5.1 Million first loss piece, Class M.

The pool collateral has been reduced by 46.5% with the current pool balance at approximately $282.9 million.

The rating action reflects a strong outlook for the pool, with the successful maturity of 19 loans since issuance (34.9% of the pool at issuance). There is one defeased loan, Prospectus ID#27, Crowsfoot Square, with 1.12% of the current pool balance. Overall, financial performance for the remaining collateral is strong, with a weighted-average debt service coverage ratio (WADSCR) of 1.86x and a weighted-average loan-to-value (WALTV) of 61.2%. All 32 of the loans remaining in the pool are current.

There are three loans on the servicer’s watchlist and DBRS has not placed any of these loans on the DBRS HotList.

DBRS has applied a net cash flow (NCF) stress scenario of 20% across all the loans in the pool and the resulting DBRS required credit enhancement levels, when compared to the current credit enhancement levels to the bonds, warrant the ratings upgrades.

DBRS continues to monitor this transaction on a monthly basis in the Global CMBS Monthly Surveillance report, which can provide more detailed information on the individual loans in the pool.

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.