DBRS Confirms Ratings to A10 Securitization 2012-1, LLC

DBRS has today confirmed the ratings to the following Notes issued by A10 Securitization 2012-1, LLC.

-- Class A at AAA (sf)
-- Class B at A (sf)
-- Class C at BBB (sf)
-- Class D at BBB (low) (sf)

The trend on Class A is Stable, while the trends on Classes B, C, and D are positive.

Since the transaction closed in April 2012, 14 loans have been repaid in full and the collateral now consists of 22 loans secured by commercial real estate. As a result of the loan repayments, credit enhancement to the investment grade rated notes has increased between 3.8% and 4.5%. Additionally, as of the May 2013 reporting period, there are no delinquent loans. The positive trend assigned to Classes B, C and D reflects the continued stable performance of the underlying loans, combined with the increased credit enhancement to each respective class, as a result of loan repayments.

All of the collateral loans were originated by A10 Capital, LLC (A10 Capital). A10 specializes in mini-perm loans, which typically have two- to five-year terms and are used to finance properties until they are fully stabilized. The borrowers are typically new equity sponsors of fairly well-positioned assets within their respective markets. A10 Capital’s initial advance is the senior debt component typically for the purchase of an REO acquisition or DPO. Most loans are structured with three-year terms and include built-in extensions at the lender’s sole discretion.

The pool consists of floating-rate loans and fixed-rate loans secured by commercial properties. The pool was analyzed to determine the indicative ratings, reflecting the probability of loan default within the term, including the lender extension options and its liquidity at maturity. The cutoff loan balances were measured against the DBRS stabilized net cash flow and its respective actual constants.

The ratings assigned by DBRS contemplate timely payments of distributable interest and, in the case of Senior Subordinate Notes other than the Class A Notes, ultimate recovery of Deferred Note Interest Amounts (inclusive of interest payable thereon at the applicable rate, to the extent permitted by law). Accordingly, DBRS will assign its “Interest in Arrears” designation to any class of Offered Notes (other than the Class A Notes) during any Interest Accrual Period when such class accrues Deferred Note Interest Amounts.

The ratings assigned to the Notes by DBRS are based exclusively on the support provided by the transaction structure and the credit underlying trust assets. All classes will be subject to ongoing surveillance, which could result in upgrades or downgrades by DBRS after the date of issuance.

Notes:
All figures are in U.S. dollars unless otherwise noted.

This rating is endorsed by DBRS Ratings Limited for use in the European Union
All classes are privately placed pursuant to Rule 144a.

The applicable methodologies are CMBS Rating Methodology and Commercial Real Estate Non-Performing Loan Liquidating Trust Methodology, which can be found on our website under Methodologies.