DBRS Downgrades Two Classes of Morgan Stanley Capital I Trust, Series 2007-IQ16

DBRS has today downgraded two classes of Morgan Stanley Capital I Trust, Series 2007-IQ16 (the Trust), as follows:

-- Class M to D (sf) from C (sf)
-- Class N to D (sf) from C (sf)

These rating actions reflect the most recent losses to the Trust, resulting from the liquidation of one loan in June 2012. As of the June 2012 remittance report, realized losses for this loan total $28.2 million; to date, 16 loans have liquidated at a cumulative loss of $77.6 million. Additionally, DBRS has removed the Interest in Arrears designation from these classes as well as from Class J through Class L, which recouped previous interest shortfalls with the resolution of this loan.

Marriott Columbia (Prospectus ID#9) was secured by a 300-room full-service hotel property in Columbia, South Carolina. The loan transferred to the special servicer in May 2010 due to payment default, after the borrower was unable to continue to cover cash flow shortfalls to keep the loan current. At issuance, the property was valued at $67.6 million and the most recent appraisal, from August 2011, valued the property at $19.9 million. According to the June 2012 remittance report, the property was sold for $17.3 million, resulting in a realized loss to the trust of $28.2 million and a loss severity of 68.3%.

For additional detail 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 June 2012 Monthly CMBS 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 and CMBS North American Surveillance Methodology, which can be found on our website under Methodologies.