DBRS Upgrades Rating on Remaining Class of Multi Security Asset Trust LP, Series 2005-RR4 to BB (high) (sf), Stable

DBRS Limited (DBRS) upgraded its rating on the remaining Commercial Mortgage-Backed Securities Pass-Through Certificates, Series 2005-RR4, Class N issued by Multi Security Asset Trust LP, Series 2005-RR4 (MSAT 2005-RR4) to BB (high) (sf) from CCC (sf). The trend is Stable.

The rating upgrade reflects increased credit support to the bond as a result of successful loan repayment as well as continued stable performance of the one remaining underlying commercial mortgage-backed security (CMBS) transaction contributing to the MSAT 2005-RR4 capital structure. As a result, Class N has current credit support of 45.1% from the unrated bond, Class O. Of the original 16 CMBS transactions underlying the MSAT 2005-RR4 transaction, the contributing classes in 15 transactions have been fully repaid. The PMAC 1999-C1 transaction is the only remaining underlying transaction that is currently contributing to the MSAT 2005-RR4 transaction, which has experienced a collateral reduction of 99.2% since issuance because of successful loan repayments and recoveries on liquidated loans.

As of the March 2019 remittance, there are two loans remaining in the PMAC 1999-C1 transaction, both of which are performing. The larger of the two loans, Regal Cinemas, Inc. (Regal Cinemas; 81.5% of the current underlying pool balance), is secured by a single-tenant movie theatre located in Fredericksburg, Virginia. The property is 100% occupied by Regal Cinemas on a lease through June 2023, coterminous with loan maturity. Per the YE2018 financials, the loan reported a debt service coverage ratio (DSCR) and debt yield of 1.07 times and 18.1%, respectively. The loan’s performance has remained consistent since issuance.

The rating assigned to Class N is different than that implied by the analysis within the DBRS North American Direct Sizing Hurdles. The variance is attributable to loan-level event risk.

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

Notes:
The principal methodology is the North American CMBS Surveillance Methodology, which can be found on www.dbrs.com under Methodologies & Criteria. 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, which can be found on www.dbrs.com in the Commentary tab under Regulatory Affairs. 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.

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.

Please see the related appendix for additional information regarding the sensitivity of assumptions used in the rating process. Please note a sensitivity analysis is not performed for CMBS bonds rated CCC or lower. The DBRS long-term rating scale definition indicates that ratings of CCC or lower are assigned when the bond is highly likely to default or default is imminent, thereby prevailing over a sensitivity analysis.

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

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