DBRS Upgrades Five Classes and Confirms Six Classes of MSAT 2005-RR4

DBRS, Inc. (DBRS) has today upgraded the ratings of the following five classes of Commercial Mortgage-Backed Securities Pass-Through Certificates, Series 2005-RR4, issued by Multi Security Asset Trust LP, Series 2005-RR4 (MSAT) as follows:

-- Class H to AAA (sf) from AA (sf)
-- Class J to AA (sf) from A (sf)
-- Class K to A (sf) from BBB (sf)
-- Class L to BBB (sf) from BB (sf)
-- Class M to BB (sf) from B (low) (sf)

Additionally, DBRS has confirmed the ratings on the remaining classes in the transaction as follows:

-- Class E at AAA (sf)
-- Class F at AAA (sf)
-- Class G at AAA (sf)
-- Class N at CCC (sf)
-- Class X-1 at CCC (sf)
-- Class O at C (sf)

All trends are Stable, except for Classes X-1, N and O, which do not have trends assigned. The rating assigned to Class D has also been discontinued as it has been repaid in full.

The rating upgrades are a result of positive credit migration on the underlying U.S. commercial mortgage-backed securities (CMBS) assets attributed to amortization, increased defeasance, loan seasoning and increased credit enhancement as a result of successful loan repayments at maturity and recoveries on liquidated loans. This performance has resulted in significant collateral reduction to the MSAT 2005-RR4 capital structure. Since issuance in March 2005, the transaction has amortized by 84.2%. Of the 16 original underlying CMBS transactions that were contributing to the MSAT 2005-RR4 transaction, the contributing classes in 13 transactions have paid off in full and two of the remaining three underlying U.S. CMBS transactions are currently experiencing principal repayment.

While potential losses associated with the underlying U.S. CMBS specially serviced loans could reduce credit enhancement or affect the lowest-rated classes, the performance of the overall MSAT 2005-RR4 transaction has been strong. As of the March 2017 remittance report, the transaction has experienced realized losses of approximately $37.0 million; however, losses have been contained to the unrated Class P-1. With this surveillance review, DBRS anticipates losses associated with the underlying specially serviced loans to be contained to Class O, which DBRS rates C (sf).

The ratings assigned to Classes, K, L and M materially deviate from the higher ratings implied by the quantitative results. DBRS considers a material deviation to be a rating differential of three or more notches between the assigned rating and the rating implied by the quantitative results that is a substantial component of a rating methodology. The deviations are warranted given the sustainability of loan performance trends have not been demonstrated.

Notes:
All figures are in U.S dollars unless otherwise noted.

The applicable methodologies are North American CMBS Rating Methodology (January 2017) and CMBS North American Surveillance (December 2016), 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.