DBRS Confirms All Classes of Merrill Lynch Financial Assets Inc., Series 2001-Canada 6

DBRS has today confirmed all classes of Merrill Lynch Financial Assets Inc., Series 2001-Canada 6 as follows:

Class A-2 at AAA
Class B at AAA
Class C at AAA
Class D at AAA
Class E at AAA
Class F at AA
Class G at A
Class H at BBB
Class J at BB

The notional class was also confirmed as follows:

Class X at AAA

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

DBRS does not rate the $3.98 Million first loss piece, Class K..

The transaction has 18 of the original 41 loans outstanding, as of the July 2011 remittance report; of those 18 loans, two loans are fully defeased, representing a cumulative 5.24% of the current pool balance. Of the remaining loans in the transaction, all but two are scheduled to mature by YE2011.

The rating confirmations reflect the continued strength of the pool’s performance, with only one loan on the servicer’s watchlist for performance issues. That loan, Prospectus ID#40, Elmira Road, represents 0.87% of the current pool balance. The loan is secured by a 40,000 sf industrial property located in Guelph, Ontario. The loan is on the servicer's watchlist for a low YE2010 DSCR of 0.40x. The property has experienced fluctuations in occupancy over the last two years after losing the largest tenant (38% of the NRA) in January 2010. Part of the space was re-leased, but overall occupancy had fallen to 76%, as of June 30, 2010, from 100% at YE2009. Property cash flow has also declined due to a 70% reduction in the rental rate for the property's largest tenant, representing 16% of the NRA, who’s lease expired in November 2009. The tenant is now occupying space on a month-to-month basis. In October 2010, the servicer conducted a site inspection of the subject property and found it to be in Good condition, with no significant items of deferred maintenance noted at the time of inspection. At the time of inspection, the property was 76.5% occupied, where it remained until May 2011, when a tenant occupying 17% of the NRA vacated its space upon lease expiration. The loan is scheduled to mature in October 2011; the servicer stated in July 2011 that the borrower indicated plans to payoff the loan at maturity. DBRS will continue to monitor the loan closely for any developments.

Of the loans scheduled to mature by YE2011, three loans are scheduled for maturity in July and August of 2011.

Prospectus ID#8, Upper James Square, matured July 1, 2011 and comprises 7.37% of the current pool balance. The loan is secured by an anchored retail property in Hamilton, Ontario. The servicer reports that the loan is now paid in full, with funds to be applied at the time of the August 2011 remittance report.

Prospectus ID#10, Metro Portfolio, comprises 6.81% of the current pool balance and is scheduled for maturity in August 2011. The loan is collateralized by five retail properties located across five suburban cities in Québec. The servicer has not received updated financials for the loan since YE2008, when the borrower’s reported a 23% decline from the underwritten NCF. However, it appears this figure is skewed, as the EGI was reported at $2.1 million as compared with $1.8 million at issuance, with an increase in overall expenditures of 50% across all five properties from the underwritten amount, which would drive the NCF decline. The servicer’s October 2010 site inspection of the portfolio found all five properties to be 100% occupancy and all properties were found to be in Good condition, with no significant items of deferred maintenance noted at the time of inspection. As of July 2011, the servicer has not received confirmation from the borrower as to its plans for the August 2011 maturity. DBRS will continue to monitor the loan for developments.

Prospectus ID#17, Longueuil Centre, comprises 4.0% of the current pool balance and is scheduled to mature in August 2011. The loan is secured by a retail property located in Longueuil, Québec. At YE2009, the borrower’s reported NCF represented an increase from the underwritten level of 36.7%. The increase is primarily due to an increase in income at the property since the loan’s origination. The servicer reported in July 2011 that the borrower planned to repay the loan at maturity. Given the strong exit debt yield of 20.56% calculated for this loan based on the YE2009 NCF figure, DBRS does not anticipate trouble refinancing the loan.

There are no loans on the DBRS HotList.

DBRS has applied a NCF stress 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 confirmations.

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

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

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