DBRS Confirms 15 Classes of Merrill Lynch Financial Assets Inc., Series 2006-Canada 19

DBRS has today confirmed the ratings of all 15 classes of Merrill Lynch Financial Assets Inc., Series 2006-Canada 19 as follows:

• Class A-2 at AAA (sf)
• Class A-3 at AAA (sf)
• Class B at AA (sf)
• Class C at A (sf)
• Class D at BBB (sf)
• Class E at BBB (low) (sf)
• Class F at BB (high) (sf)
• Class G at BB (sf)
• Class H at BB (low) (sf)
• Class J at B (high) (sf)
• Class K at B (sf)
• Class L at B (low) (sf)
• Class XP-1 at AAA (sf)
• Class XP-2 at AAA (sf)
• Class XC at AAA (sf)

Trends for Class J, K and L changed to Stable from Negative. All other classes were confirmed with a Stable trend.

These rating actions reflect the continued stable performance of the pool overall. At the time of the February 2011 DBRS review of this transaction, there were two loans in special servicing and two large loans on the servicer’s watchlist. Given the uncertainty surrounding these four loans, DBRS placed classes J, K and L on trend Negative at that time. Shortly after the review, one of the loans in special servicing, Prospectus ID #23 (Summit Properties), was resolved with no loss to the trust and the two large loans on the watchlist, Prospectus ID #3 (Castle Royale) and Prospectus ID #10 (8100 Granville), have been removed as the performance has improved significantly for each property. Reflecting these developments, DBRS has changed the trends for classes J, K and L to Stable.

As of the February 2012 remittance report, there were 58 of the original 75 loans in the pool remaining, with a collateral reduction of approximately 24.2% since issuance. With 96.6% of loans reporting updated financial information, the pool has a weighted-average DSCR of 1.5x, as compared to 1.4x at issuance. In addition, the current weighted-average debt yield is 12.1% and the weighted-average LTV is 64.5%, as compared to 10.3% and 70.6%, respectively, at issuance. There is one loan in special servicing, Prospectus ID #4 (Marriott Pooled Senior Loan), which comprises 5.6% of the outstanding pool balance. There are 11 loans on the servicer’s watchlist; those loans combine for 10.9% of the outstanding pool balance.

For a complete discussion of the DBRS viewpoint, including detailed information on the largest loans in the pool, the loans in special servicing and the loans on the servicer’s watchlist, please see the February 2012 Monthly Surveillance Report for this pool, which will publish shortly.

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

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