DBRS Upgrades Six Classes of ClareGold Trust, Series 2006-1

DBRS has today upgraded the ratings of five classes of ClareGold Trust Commercial Mortgage Pass-Through Certificates, Series 2006-1 as follows:

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

The remaining classes were confirmed as follows:

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

All trends are Stable.

These rating actions reflect the overall stable performance for the remaining six of the original 105 loans in the pool, with a weighted-average debt service coverage ratio (DSCR) of 1.93 times (x) and a weighted-average debt yield of 21.71%, based on the net cash flow figures at YE2011. The pool has paid down significantly, with a collateral reduction of 94.92% since issuance. All of the remaining loans are scheduled to mature by August 2013. The pool benefits from full recourse for five of the remaining six loans, representing 71.61% of the pool. As of the February 2013 remittance report, there are two loans on the servicer’s watchlist, representing 17.88% of the remaining pool balance. Prospectus ID #52 is on the watchlist for upcoming lease expiration of the sole tenant at the property. The tenant has been located at the property since early 2003 and expanded in 2008. The tenant has one five-year renewal option remaining in their current lease. The renewal could cause some delay in refinancing at the loan’s maturity date; however, the loan metrics on a dark value basis remain strong and the loan is 100% recourse to the sponsor. Prospectus ID #65 is on the watchlist for upcoming maturity in April 2013. Given the credit characteristics of that loan with a healthy DSCR of 1.78x and a strong debt yield of 40.90%, DBRS does not anticipate difficulty refinancing the loan within the next few months.

There are two loans shadow-rated investment grade based on the strength of the recourse guarantors that remain in the pool, representing a combined 41.49% of the current pool balance. DBRS has confirmed both shadow ratings for these loans based on the continued strong performance of each individual loan and strong sponsorship.

For additional detail on the DBRS viewpoint for this transaction, and for details on all of the remaining loans in the pool, please see the February 2013 Monthly CMBS Surveillance Report for this transaction, which will be published shortly.

Notes:
All figures are in Canadian dollars unless otherwise noted.

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

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