DBRS Upgrades Five Classes and Confirms One Class of Column Canada 2002-CCL1

DBRS has today upgraded the ratings of five classes of Column Canada Issuer Corporation, Commercial Mortgage Pass-Through Certificates, Series 2002-CCL1 as follows:

-- Class E to AAA (sf) from A (high) (sf)
-- Class F to AAA (sf) from A (low) (sf)
-- Class G to AA (sf) from BBB (sf)
-- Class H to BB (high) (sf) from BB (sf)
-- Class J to BB (low) (sf) from B (high) (sf)

DBRS has also confirmed the rating of one class as follows:

-- Class A-X at AAA (sf)

All trends are Stable.

The rating actions reflect the overall stable performance of the six remaining loans in the pool, with a weighted-average debt service coverage ratio (DSCR) of 1.38 times (x) and a weighted-average debt yield of 12.41% as of the most recent year-end reporting date for each loan. Two loans representing 45.14% of the pool are reporting YE2011 financials and three loans representing 46.51% of the pool are reporting YE2010 financials. The pool has seen a significant collateral reduction of 93.91% since issuance. Of the remaining loans, one loan is fully defeased (8.35% of the pool) and is scheduled to mature in June 2012.

As there has been significant paydown since issuance for the pool overall, the trust’s exposure is heavily concentrated on a loan-by-loan basis. Given these factors and the high concentration of maturities scheduled through the remainder of 2012, DBRS sized each loan individually for the purposes of this review. As the remaining loans benefit from relatively short amortization schedules (25 years or less) and conservatively underwritten cash flows at issuance, there is a healthy cushion against cash flow volatility and cycles in the financial markets. To gauge the pool’s performance through the near term in the event of general market disruption or collateral-specific events, existing property cash flows were stressed with a significant haircut and DBRS applied cap rates at the higher end of the spectrum by property type to derive a conservative value for modeling purposes. Despite this highly stressed scenario, the resulting credit indicators are still healthy for the pool overall, providing strong support for the rating actions taken as part of this review.

Four of the six remaining loans are on the servicer’s watchlist representing 75.81% of the pool. All four of the loans are being monitored for upcoming or recent maturity. One of the loans on the servicer’s watchlist is also being monitored for a low DSCR.

Prospectus ID #18 Everest Self Storage, representing 29.30% of the current pool balance, is secured by four self-storage properties throughout Ontario. The loan was originally watchlisted for a poor site inspection, but now is on the watchlist for a declining DSCR and upcoming maturity in July 2012. The DSCR decreased from 1.43x at issuance to 1.14x at YE2011 due to decreasing occupancy at two of the properties. Despite the DSCR decline, the portfolio is still performing at relatively healthy levels. DBRS expects the loan to pay at maturity or soon after.

For additional detail on the DBRS viewpoint for this transaction, and for details on all of the remaining loans in the pool, please see the May 2012 Monthly CMBS Surveillance Report for this transaction, which will be published shortly.

Note:
The applicable methodologies are CMBS Rating Methodology and CMBS North American Surveillance Methodology, which can be found on our website under Methodologies at www.dbrs.com.