DBRS Upgrades Seven and Confirms Six Classes of Schooner Trust, Series 2006-5

DBRS has today upgraded seven classes of Commercial Mortgage Pass-Through Certificates, Series 2006-5 issued by Schooner Trust, Series 2006-5 as follows:

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

In addition, DBRS has confirmed the remaining classes:

-- Class A-1 at AAA (sf)
-- Class A-2 at AAA (sf)
-- Class B at AAA (sf)
-- Class X-C at AAA (sf)
-- Class K at B (high) (sf)
-- Class L at B (low) (sf)

The trends on all classes are Stable.

The pool has experienced a 29.85% collateral reduction since issuance, with 71 of the original 91 loans still outstanding as of the May 2014 remittance. Loans in the top 15 have experienced a weighted-average net cash flow growth of 7.2% since issuance and the weighted-average debt yield for these loans is 12.2%. Since the last surveillance review, four loans were repaid from the trust and one loan was defeased, bringing the total defeasance in the pool to 10.5% of the current pool balance. One loan, representing 4.4% of the current pool balance, is scheduled to mature in 2014, with the rest of the outstanding loans scheduled to mature in 2015 and 2016. The weighted-average debt-service-coverage-ratio for the pool is 1.6 times (x), compared with 1.5x at issuance, and the weighted-average debt yield is 14.5%, compared with 10.6% at issuance.

There are no delinquent or specially serviced loans; however, seven loans are currently flagged for the servicer’s watchlist as of the May 2014 remittance. DBRS does not consider any of these loans to be at immediate risk of default and continues to monitor the watchlist on a monthly basis.

DBRS maintains investment-grade shadow ratings on three loans in the transaction, which collectively represent 5.65% of the current pool balance. DBRS has today confirmed that the performance of these loans remains consistent with investment-grade loan characteristics.

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 June 2014 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.

The applicable methodologies are CMBS Rating (January 2012) and North American CMBS Surveillance (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.