DBRS Upgrades 7, Confirms 8 Classes of Merrill Lynch Financial Assets Inc., Series 2005-Canada 16

DBRS has today upgraded the ratings for seven classes of Merrill Lynch Financial Assets Inc., Series 2005-Canada 16 Commercial Mortgage Pass-Through Certificates as follows:

-- Class C to AA (high) (sf) from AA (sf)
-- Class D-1 to A (high) (sf) from A (sf)
-- Class D-2 to A (high) (sf) from A (sf)
-- Class E-1 to A (sf) from A (low) (sf)
-- Class E-2 to A (sf) from A (low) (sf)
-- Class F to BBB (high) (sf) from BBB (sf)
-- Class G to BBB (low) (sf) from BB (high) (sf)

Additionally, DBRS has today confirmed the ratings of the eight remaining classes in the transaction. DBRS does not rate the $4.6 million first loss piece, Class M. All trends are Stable.

The rating upgrades reflect the strong performance of the transaction since issuance, with ten loans having been successfully repaid. Overall, the financial performance of the remaining 38 loans remains healthy, with a weighted-average debt service coverage ratio (DSCR) of 2.03 times (x) and a weighted-average debt yield of 23.6%. As of the April 2013 remittance report, the initial pool balance has been reduced by approximately 31.9%.

DBRS shadow-rates six loans in the transaction, which collectively represent 40.9% of the current pool balance, as investment grade. DBRS has today confirmed that the performance of these loans remains consistent with investment-grade loan characteristics.

There are no loans in special servicing and are two loans on the servicer’s watchlist, representing 1.5% of the current pool balance. These loans remain current, but are being monitored for low DSCR and deferred maintenance issues.

As part of its review, DBRS analyzed the top 15 loans, the shadow-rated loans and the loans on the servicer’s watchlist, which comprise approximately 84.8% of the current pool balance.

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 April 2013 Monthly CMBS 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 (November 2012), which can be found on our website under Methodologies.