DBRS Upgrades Three Classes and Confirms Two Classes of Schooner Trust, Series 2006-6

DBRS Limited (DBRS) has today upgraded three classes of the Commercial Mortgage Pass-Through Certificates, Series 2006-6 issued by Schooner Trust, Series 2006-6 as follows:

-- Class H upgraded to A (sf) from BB (sf)
-- Class J upgraded to A (sf) from BB (low) (sf)
-- Class K upgraded to A (sf) from B (high) (sf)

Additionally, DBRS has confirmed the rating on the following classes:

-- Class XC confirmed at A (sf)
-- Class L confirmed at B (low) (sf)

All trends are Stable.

The rating upgrades reflect the collateral reduction since issuance and current outlook for the last two remaining loans in the portfolio. As of the April 2017 remittance, the pool reported an outstanding principal balance of $7.3 million. The two remaining loans are secured by industrial properties situated within close proximity to each other in Montréal, Québec. The loans were transferred to the special servicer in December 2016, as the previously extended maturity dates for each passed without repayment. According to the special servicer, the borrower expects to close a sale for both properties in the near term at a price well above the combined outstanding principal balance.

DBRS believes the remaining rated classes are well insulated, as there is an unrated class with a current balance just under $5.0 million, indicating the properties could be liquidated at a price of less than half of the reported sales price for the impending sale without losses affecting rated classes.

For detailed information on the DBRS viewpoint with regards to the assets remaining, please see the loan-level commentary at ireports.dbrs.com.

The rating assigned to Class H, J, and K materially deviates from the higher rating 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; in this case, the assigned rating reflects uncertain loan level event risk. The rating assigned to Class XC materially deviates from the lower rating implied by the quantitative results due to consideration given for actual loan, transaction and sector performance where a rating based on the lowest rated notional class may not reflect the observed risk.

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 principal methodologies are North American CMBS Rating Methodology (January 2017) and CMBS North American Surveillance (December 2016), which can be found on dbrs.com under Methodologies.

For more information on this credit or on this industry, visit www.dbrs.com or contact us at info@dbrs.com.