DBRS Confirms All Classes of Merrill Lynch Financial Assets Inc., Series 2002-Canada 8

DBRS Limited (DBRS) confirmed the ratings on the following classes of Merrill Lynch Financial Assets Inc., Series 2002-Canada 8:

-- Class K at AAA (sf)
-- Class X-1 at AAA (sf)
-- Class X-2 at AAA (sf)

All trends are Stable.

The rating confirmations reflect the stable performance of the transaction and the increased credit support to the bonds as a result of scheduled loan amortization and successful loan repayment. As of the November 2017 remittance, 15 of the original 70 loans remained in the trust, representing a collateral reduction of 97.9%. The transaction also benefits from defeasance collateral, as four loans, representing 23.7% of the current pool balance, are fully defeased. Based on the most recent financials, the pool reported a weighted-average (WA) debt service coverage ratio (DSCR) of 2.01 times (x) and a WA debt yield of 93.0%. Seven of the remaining loans, representing 38.4% of the current pool balance, are scheduled to mature by 2019. All remaining loans are fully amortizing and reported healthy net cash flows and occupancy rates. In addition, all loans benefit from full or partial recourse to their respective sponsors.

As of the November 2017 remittance, one loan, representing 8.1% of the current pool balance, was on the servicer’s watchlist for deferred maintenance; however, the items observed are relatively minor, and performance remains strong with a YE2016 DSCR of 2.19x. Four loans, representing 28.9% of the current pool balance, are secured by properties located in Alberta, and these loans reported a healthy WA YE2016 DSCR of 1.83x.

Classes X-1 and X-2 are interest-only (IO) certificates that reference a single rated tranche or multiple rated tranches. The IO ratings mirror the lowest-rated reference tranche and may be adjusted upward by one notch if senior in the waterfall.

All ratings will be subject to ongoing surveillance, which could result in ratings being upgraded, downgraded, placed under review, confirmed or discontinued by DBRS.

DBRS has provided updated loan-level commentary and analysis for larger and/or pivotal watchlisted loans in the transaction in the DBRS Viewpoint platform. Registration is free. To view these and future loan-level updates provided as part of DBRS’s ongoing surveillance for this transaction, please register or log into DBRS Viewpoint at viewpoint.dbrs.com.

Notes:
All figures are in Canadian dollars unless otherwise noted.

The principal methodology is CMBS North American Surveillance, which can be found on dbrs.com under Methodologies. For a list of the Structured Finance related methodologies that may be used during the rating process, please see the DBRS Global Structured Finance Related Methodologies document on www.dbrs.com. Please note that not every related methodology listed under a principal Structured Finance asset class methodology may be used to rate or monitor an individual structured finance or debt obligation.

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 under Related Documents or by contacting us at info@dbrs.com.

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

The rated entity or its related entities did participate in the rating process for this rating action. DBRS had access to the accounts and other relevant internal documents of the rated entity or its related entities in connection with this rating action.

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