DBRS Confirms Two Classes of Schooner Trust, Series 2005-3

DBRS Limited (DBRS) has today confirmed the ratings on the following classes of Schooner Trust, Series 2005-3:

-- Class XC-1 at AAA (sf)
-- Class XC-2 at AAA (sf)

All trends are Stable. DBRS does not rate the first loss piece, Class M.

The rating confirmations reflect the current performance of the transaction. At origination, the transaction consisted of 94 loans secured by 97 properties. As of the September 2015 remittance, the transaction has experienced a collateral reduction of 99.4% as a result of loan amortization and successful loan repayment as 93 loans have successfully paid out of the pool since issuance, leaving one remaining loan in the pool.

The sole remaining loan in the pool, Carré Gouin (Prospectus ID #56), is secured by a 65,970 square foot mixed-use property (retail and office) located in western Montréal, built in 1978 and renovated in 2004. The loan originally matured in April 2015; however, the borrower has continually requested month-to-month loan extensions while it finalizes its plan to secure refinancing capital. The loan has historically struggled as it has been on the servicer’s watchlist since October 2012 because of a low occupancy rate and a low debt service coverage ratio (DSCR). The most recent financials from YE2013 exhibit a DSCR of 0.85 times (x), which improved from the YE2012 DSCR of 0.65x. According to the April 2014 rent roll, the occupancy rate was 69.5% and there was high rollover as five leases, representing 22.0% of net rentable area, expire in 2015. Despite ongoing performance issues, according to the servicer, the borrower is expected to repay the loan in full in the near term and the loan will not be transferred to special servicing.

DBRS continues to monitor this transaction in its Monthly CMBS Surveillance. The September 2015 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 related regulatory disclosures pursuant to the National Instrument 25-101 Designated Rating Organizations are hereby incorporated by reference and can be found by clicking on the link to the right under Related Research or by contacting us at info@dbrs.com.

This rating is endorsed by DBRS Ratings Limited for use in the European Union.

The applicable methodologies are North American CMBS Rating Methodology (June 2015) and CMBS North American Surveillance (January 2015), which can be found on our website under Methodologies.