DBRS Confirms All Classes of Merrill Lynch Financial Assets Inc., Series 2005-Canada 15

DBRS has today confirmed the ratings of all classes of Merrill Lynch Financial Assets Inc. Commercial Mortgage Pass-Through Certificates, Series 2005-Canada 15 as follows:

Class A-1 at AAA (sf)
Class A-2 at AAA (sf)
Class XC-1 at AAA (sf)
Class XP-2 at AAA (sf)
Class B at AA (high) (sf)
Class C at A (high) (sf)
Class D-1 at BBB (high) (sf)
Class D-2 at BBB (high) (sf)
Class E-1 at BBB (sf)
Class E-2 at BBB (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)

The rating confirmations reflect the stable credit enhancement to the bonds from a collateral reduction of approximately 36.76% since issuance. As of the October 2012 remittance report, 16 loans have paid out of the pool since issuance, leaving 42 loans remaining in the transaction. Additionally, three loans, representing 13.84% of the current pool balance, are defeased. The weighted-average debt service coverage ratio (DSCR) and weighted-average loan-to-value (LTV) remain stable at 1.74 times (x) and 58.34%, respectively.

At issuance, DBRS shadow-rated one loan, representing 12.57% of the current pool balance, as investment grade. DBRS confirms that the performance of this loan remains consistent with investment-grade loan characteristics.

As of the October 2012 remittance report, there are three loans on the servicer’s watchlist, representing 3.67% of the current pool balance. These loans remain current, but are reporting performance issues and therefore have been placed on the servicer’s watchlist.

The transaction has specific exposure to RONA inc. (RONA) as nine loans in the pool are secured by a RONA home and garden retail store. The loans are not cross-collateralized or cross-defaulted and represent 24.00% of the current pool balance. The properties are located in various cities throughout Ontario and Québec, and the RONA leases are not scheduled to expire until November 2019, five years past the loan maturities. DBRS confirmed its rating of RONA in May 2012 at BBB (low) with a Negative trend. For more information on the DBRS rating of RONA, please see the press release dated May 30, 2012, which can be found at www.dbrs.com.

As part of its review, DBRS analyzed the largest 15 loans in the pool, the three loans on the servicer’s watchlist and the shadow-rated loan, which comprise approximately 70.87% of the current pool balance.

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

Note:
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.