DBRS Upgrades 12 Classes of MACH ONE 2005-CDN1, ULC

DBRS has today upgraded the ratings of 12 classes of MACH ONE 2005-CDN1, ULC Canadian Commercial Mortgage-Backed Securities Pass-Through Certificates (MACH ONE) as follows:

-- Class B to AA (high) (sf) from AA (sf)
-- Class C to A (high) (sf) from A (sf)
-- Class D to A (sf) from A (low) (sf)
-- Class E to A (low) (sf) from BBB (high) (sf)
-- Class F to BBB (high) (sf) from BBB (sf)
-- Class G to BBB (sf) from BBB (low) (sf)
-- Class H to BBB (low) (sf) from BB (high) (sf)
-- Class J to BB (high) (sf) from BB (sf)
-- Class K to BB (sf) from BB (low) (sf)
-- Class L to BB (low) (sf) from B (high) (sf)
-- Class M to B (high) (sf) from B (sf)
-- Class N to B (sf) from B (low) (sf)

Additionally with the ratings upgrades, DBRS has changed the trends of Class B through Class G to Stable from Positive. DBRS does not rate the first loss piece, Class CS.

The rating upgrades reflect the positive credit migration on the underlying Canadian commercial mortgage-backed securities (CMBS) assets, attributed to amortization, increased defeasance, loan seasoning and increased credit enhancement as a result of successful loan repayments as issuance. This performance has resulted in significant collateral reduction to the MACH ONE capital structure. Since issuance in July 2005, the transaction has amortized by 61.6%, including 14.3% since the last DBRS rating action in April 2013. Of the 12 original underlying CMBS transactions that were contributing to the MACH ONE transaction, the contributing classes in five transactions have been paid off in full, and two of the remaining seven underlying CMBS transactions are currently experiencing principal prepayment.

Six of the seven outstanding underlying CMBS transactions are publicly rated by DBRS. The largest single deal concentration contributing to the MACH ONE capital structure is 28.9% of the pool balance (Merrill Lynch Financial Assets Inc., Series 2004-Canada 12), and the four largest deals represent 83.0% of the pool balance. None of the contributing classes in the underlying CMBS transaction have experienced a loss and none are projected to at this time.

A full report providing additional analytical detail on the contributing underlying Canadian CMBS transactions will be published shortly.

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

The applicable methodology is 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.