DBRS Confirms the Ratings of Merrill Lynch Mortgage Loans, Inc., Series 1998-Canada 1

DBRS has today confirmed the ratings of Merrill Lynch Mortgage Loans, Inc., Series 1998-Canada 1 as follows:

Class E at AA (sf)
Class F at A (sf)
Class X at AAA (sf)

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

DBRS does not rate the $4.7 million first loss piece, Class G.

The rating confirmations reflect the stable performance of the transaction. As of the July 2011 remittance report, the three remaining loans reported a weighted-average DSCR of 1.82x and a weighted-average LTV of 67%. The transaction is concentrated not only by the number of loans but also by property type, with 52.5% of the current transaction balance being represented by hotel loans. There are currently no loans on the servicer’s watchlist but there is one loan in special servicing.

Prospectus ID#23, The Pointe Inn (13.9% of the current transaction balance) is secured by a 150-unit full-service hotel located in Calgary that transferred to the special servicer in February 2008, after the ownership interest transferred to a third party without lender approval. According to the special servicer, the ownership has transferred a number of times since the special servicing transfer and the current borrower has filed with the Canadian courts to pay off the loan with no prepayment penalty. The DBRS rated classes have credit support from the unrated Class G, which has a current balance of $4.7 million, as of the July 2011 remittance report. Based on the outstanding loan balance of approximately $2 million on The Point Inn loan, and the outstanding advances total of $282,585, DBRS does not anticipate the resolution of this loan to affect the DBRS rated classes.

The DBRS analysis included an in-depth review of all three loans that remain in the transaction. The remaining three loans were structured as fully amortizing loans and will have no outstanding balance at their respective maturity dates, which occur between September 2018 and May 2020.

DBRS continues to monitor this transaction on a monthly basis, with further updates to be published in our Monthly CMBS Surveillance Report.

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

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