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

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

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

Additionally, DBRS has confirmed the ratings on the remaining classes in the transaction. The trends on Classes C, D, E, X-1, F, G, H and J are Stable. There is no trend on Class K.

The ratings upgrades reflect the increased credit enhancement to the bonds as a result of loan repayment and amortization, in addition to substantial defeasance collateral. Two loans, representing 80.67% of the current pool, are fully defeased. Since issuance, there has been collateral reduction of 90.4%, with five loans remaining in the pool out of the original 90 loans. Approximately 19.0% of total collateral reduction has occurred over the past 12 months, as 47 loans have been paid in full over the past year.

As of the August 2014 remittance, there is one loan, Alta Mesa (Prospectus ID#54), in special servicing, due to a maturity default in January 2014. According to the special servicer, the borrower has expressed interest in refinancing the loan; however, the loan performance has declined after some tenants vacated the property at the end of 2013. An updated appraisal was completed in May 2014, which suggested a value in excess of the current loan amount; however, the special servicer is exploring all possible options, including foreclosure. DBRS will continue to monitor the loan and will follow up with the special servicer regarding its resolution strategy.

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 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:
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.