DBRS Upgrades Three Classes and Confirms Three Classes of Multi Security Asset Trust LP, Series 2005-RR4

DBRS Limited (DBRS) upgraded the ratings of three classes of Commercial Mortgage-Backed Securities Pass-Through Certificates, Series 2005-RR4 issued by Multi Security Asset Trust LP, Series 2005-RR4 (MSAT 2005-RR4) as follows:

-- Class K to AAA (sf) from A (sf)
-- Class L to A (high) (sf) from BBB (sf)
-- Class M to BBB (high) (sf) from BB (sf)

The following classes have been confirmed:

-- Class N at CCC (sf)
-- Class X-1 at CCC (sf)
-- Class O at C (sf)

All trends are Stable, except for Classes N, X-1 and O, which do not have trends assigned. The rating assigned to Class J has also been discontinued following the full repayment of the outstanding balance as of the March 2018 remittance.

The rating upgrades reflect the positive credit migration of the underlying U.S. commercial mortgage-backed security (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. The performance has resulted in significant collateral reduction to the MSAT 2005-RR4 capital structure. Since issuance in March 2005, the transaction has amortized by 93.9%. Of the 16 original underlying CMBS transactions that were contributing to the MSAT 2005-RR4 transaction, the contributing classes in 14 transactions have paid off in full and the two remaining underlying CMBS transactions are currently experiencing principal repayment.

There are currently no specially serviced loans associated with the underlying transactions; however, the underlying FULBA 1998-C2 transaction has three loans, representing 13.7% of the remaining pool, that are currently on the servicer’s watchlist. All three loans are current and have been flagged for various reasons, including upcoming maturity, declines in financial performance or deferred maintenance. The largest watchlisted loan, 263 Highland Tech Center, representing 7.3% of the remaining FULBA 1998-C2 pool, was flagged as the scheduled maturity is in April 2018 and the borrower is currently exploring refinance options, according to the servicer. The loan was previously in special servicing; however, a workout strategy was resolved, and the loan returned to the master servicer in May 2013. The loan is reporting a Q3 2017 annualized debt service coverage ratio (DSCR) of 1.64 times (x) compared with the YE2016 DSCR of 1.81x.

Class X-1 is an interest-only (IO) certificate that references a single rated tranche or multiple rated tranches. The IO rating mirrors the lowest-rated reference tranche 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.

The ratings assigned to Classes 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 that the sustainability of loan performance trends was not demonstrated.

Notes:
All figures are in U.S. 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.

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