DBRS Downgrades One Class of Merrill Lynch Mortgage Trust 2005-CIP1

DBRS has today downgraded Class K of Merrill Lynch Mortgage Trust 2005-CIP1 to D (sf) from C (sf). The downgrade follows the $8.5 million of realized trust loss attributed to the liquidation of one loan in the March 2014 remittance period. In conjunction with the downgrade, DBRS has also removed the Interest in Arrears designation from Class K, as it has now defaulted.

University Village (Prospectus ID#12) was previously the second-largest loan in special servicing. The loan was secured by a large anchored retail property located near the University of California Riverside campus in Riverside, California. It transferred to the special servicer in February 2009 and was modified in March 2011. Terms of the modification included an A/B note restructure consisting of a $21 million A note, a $10.1 million B note and a capital infusion of $1.4 million. An October 2011 appraisal valued the property at $24.0 million, down from $41.1 million at issuance. Although the loan continued to perform as agreed post-modification, it was never transferred back to the master servicer. The loan was disposed from the trust in March 2014 via a discounted payoff, which resulted in a full recovery of the A note and a B note loss of approximately $8.5 million. The realized trust loss wiped the remaining balance of Class L, already rated D (sf) by DBRS, and reduced the principle balance of Class K by 68.5%.

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, the loans in special servicing and the loans on the servicer’s watchlist. The March 2014 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 U.S. 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.

For more information on this credit or on this industry, visit www.dbrs.com or contact us at info@dbrs.com.