DBRS Downgrades Class K of ML-CFC Commercial Mortgage Trust, Series 2006-1

DBRS has today downgraded the Class K certificates of the ML-CFC Commercial Mortgage Trust, Series 2006-1 (the Trust) from C (sf) to D (sf).

This rating action reflects the most recent losses to the Trust, resulting from the liquidation of two loans in May 2012. As of the May 2012 remittance report, realized losses for those two loans combined totaled $7.80 million; to date, 14 loans have been liquidated at a cumulative loss of $54.17 million.

Prospectus ID #71 (International Promenade) was secured by a 35,000 sf anchored retail center located in the Orlando suburb of Kissimmee, Florida. The loan transferred to the special servicer in January 2009 after occupancy declines and the resulting loss in cash flow eliminated the property’s ability to sustain the debt service obligations on the trust loan. At issuance, the property was valued at $9.00 million and the most recent appraisal, from March 2011, valued the asset at $3.15 million. According to the May 2012 remittance report, the property was sold for approximately $2.97 million, resulting in a loss of $4.54 million and a loss severity of 73.99%.

The second loan liquidated in May 2012 is Prospectus ID #81 (Cambridge Quail). The loan was secured by a 50,000 sf office property located in Las Vegas and was constructed in 1989. The loan transferred to the special servicer in February 2011 after the borrower requested relief. The property’s occupancy had been low since 2008 and cash flows had suffered significantly as a result. The loan became Real Estate Owned (REO) in November 2011. At issuance, the property was valued at $8.70 million and the April 2011 appraisal obtained by the servicer valued the property at $2.30 million. According to the May 2012 remittance report, the property was sold for approximately $2.78 million, resulting in a realized loss of $3.27 million and a loss severity of 70.76%.

For additional details on the DBRS viewpoint for this transaction, and for details on the largest loans in the pool, the loans in special servicing and the loans on the servicer’s watchlist, please see the May 2012 Monthly Surveillance Report for this transaction, which will be published shortly.

Notes:
All figures are in U.S. dollars unless otherwise noted.

This rating is endorsed by DBRS Ratings Limited for use in the European Union.

The applicable methodologies are CMBS Rating Methodology (January 2012) and CMBS North American Surveillance Methodology (May 2011), which can be found on our website under Methodologies.