DBRS Confirms All 14 Classes of Schooner Trust, Series 2006-6
CMBSDBRS has today confirmed the ratings of all 14 classes of Schooner Trust Commercial Mortgage Pass-Through Certificates, Series 2006-6, as follows:
-- Class A-1 at AAA (sf)
-- Class A-2 at AAA (sf)
-- Class XC at AAA (sf)
-- Class XP 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)
All trends are Stable.
The ratings confirmations reflect the increased credit enhancement from a collateral reduction of approximately 21.4% since issuance. As of the September 2012 remittance report, 18 loans have paid out of the pool since issuance, leaving 80 loans remaining in the transaction. The weighted-average debt service coverage ratio (DSCR) and weighted-average LTV remain stable at 1.51x and 60.3%, respectively.
There are currently seven loans on the servicer’s watchlist, representing 11.7% of the current pool balance. These loans remain current, but are reporting performance issues and have been placed on the servicer’s watchlist. One of these loans is highlighted below.
The EPCOR Centre loan (4.18% of the current pool balance) is secured by an office building in the financial district of downtown Edmonton. The loan was added to the servicer’s watchlist after the namesake tenant, EPCOR Utilities, which occupied 98% of the NRA, vacated the property when its lease expired at YE2011. According to the servicer, the sponsor, GE Canada, is currently in the process of completing major renovations at the property, scheduled to be delivered in Q1 2013. Renovations at the property will transform the property into a Class A office tower. New features and amenities at the property will include new floor plans making the building suitable for multiple tenants, floor-to-ceiling windows, an underground parking garage and a rooftop garden among modern office finishes. Additionally, the servicer reports that the property is 90% pre-leased to four tenants, all of which have a minimum lease term of five years, which extends beyond loan maturity. While the property will be vacant throughout all of 2012, the loan benefits from 100% recourse to GE Canada and DBRS views the redevelopment of the property as a positive occurrence.
As part of its review, DBRS analyzed the top 15 loans and the loans on the servicer’s watchlist, which comprise approximately 62.23% of the current pool balance.
DBRS continues to monitor this transaction in its Monthly CMBS Surveillance Report to assess any material changes at the bond or collateral level that may affect ratings. The Monthly CMBS Surveillance Report also highlights any material updates in the loans on the servicer’s watchlist and any specially serviced loans.
Notes:
All figures are in Canadian 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.
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