DBRS Upgrades Six Classes, Confirms Five of COMM 2004-LNB2

DBRS has today upgraded six classes of COMM 2004-LNB2 as follows:

-- Class D to AAA (sf) from AA (high) (sf)
-- Class E to AAA (sf) from A (high) (sf)
-- Class F to AA (sf) from A (sf)
-- Class G to A (sf) from BBB (sf)
-- Class H to BB (sf) from B (low) (sf)
-- Class J to B (sf) from CCC (sf)

Additionally, DBRS has confirmed the ratings on the remaining classes in the transaction. All trends are Stable.

The ratings upgrades reflect the increased credit enhancement to the bonds as a result of loan repayment and amortization, in addition to the current performance and maturity profile of the remaining loans. Since issuance, there has been collateral reduction of 71.4%, with 52 loans remaining in the pool out of the original count of 90 loans. Approximately 42.4% of total collateral reduction has occurred over the past 12 months, as eight loans, including three of the four largest loans at issuance, have been paid in full over the past year. The transaction also benefits from defeasance collateral as eight loans, representing 43.5% of the current pool balance, are fully defeased.

In the next 12 months, 48 loans, representing 71.2% of the current pool balance are scheduled to mature. Excluding defeasance, these loans have a weighted-average exit debt yield of 13.2%. Likewise, the largest 15 loans in the transaction continue to exhibit stable performance, with a weighted-average debt service coverage ratio and weighted-average exit debt yield of 1.56x and 13.2%, respectively.

As part of its review, DBRS analyzed the top 15 loans and loans on the servicer’s watchlist, which comprise approximately 80.9% of the current pool balance. As of the September 2013 remittance, there are ten loans on the servicer’s watchlist, representing 10.1% of the current pool balance. DBRS considered the current performance of these loans in its analysis, which included assigning an elevated probability of default associated with the latest reported cash flows to the extent it was warranted. There are no specially serviced assets in this transaction.

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, specially serviced loans and loans on the servicer’s watchlist. The September 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 U.S. 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 (November 2012), which can be found on our website under Methodologies.