DBRS Upgrades Four Classes and Confirms Five Others of Merrill Lynch Financial Assets Inc., Series 2002-Canada 8

DBRS has today upgraded four classes of Merrill Lynch Financial Assets Inc., Series 2002-Canada 8 as follows:

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

In addition, DBRS has confirmed five classes as follows:

-- Class D at AAA (sf)
-- Class E at AAA (sf)
-- Class F at AAA (sf)
--Class X-1 at AAA (sf)
-- Class X-2 at AAA (sf)

DBRS does not rate the $8.2 million first loss piece, Class L. All trends are Stable

The rating upgrades reflect the strong performance the pool continues to exhibit, with 45 loans having been successfully repaid since issuance out of the original loan count of 70. Since the last DBRS rating action of the transaction in June 2012, 24 loans have repaid in full. As of the February 2013 remittance report, approximately 91.7% of the collateral has been reduced, with 42.7% of collateral reduction having occurred since June 2012. Additionally, two loans, representing 4.1% of the pool balance, are defeased.

There are no loans in special servicing and four loans on the servicer’s watchlist, representing approximately 19.4% of the current pool balance. All four loans remain current and are being monitored for a low debt service coverage ratio (DSCR).

As part of its review, DBRS analyzed the top 15 loans and the loans on the servicer’s watchlist, which comprise approximately 82.0% of the current pool balance.

DBRS has applied a net cash flow (NCF) stress scenario across all the loans in the pool and the resulting DBRS required credit enhancement levels, when compared with the current credit enhancement levels to the bonds, warrant the rating upgrades.

DBRS continues to monitor this transaction in its Monthly CMBS Surveillance Report, with additional information on the DBRS viewpoint for this transaction including details on the largest loans in the pool and loans on the servicer’s watchlist. The February 2013 Monthly Surveillance Report for this transaction will be published shortly. If you are interested in receiving this report, contact us at info@dbrs.com.

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.