Fitch Affirms 7 World Trade Center

NEW YORK--(BUSINESS WIRE)-- Fitch Ratings has affirmed 11 classes of New York Liberty Development Corporation, liberty revenue refunding bonds, series 2012 and 7 WTC Depositor, LLC Trust 2012-WTC (collectively, 7 World Trade Center). A detailed list of rating actions follows at the end of this press release.

KEY RATING DRIVERS

The affirmations are based on the stable performance of the underlying collateral. The transaction represents a securitization of the beneficial leasehold mortgage interest in the 7 World Trade Center office property located on the north end of the World Trade Center site in Downtown Manhattan.

The liberty bonds and the commercial mortgage-backed security (CMBS) certificates, which follow a sequential pay structure and are administered pursuant to a traditional CMBS servicing agreement, are scheduled to amortize fully by their respective maturity dates following an initial interest-only (IO) period. The liberty bonds are IO for 16 years followed by full amortization by 2044. The CMBS bonds are IO for the first year followed by six-year full amortization. The one-year IO period for the CMBS certificates ended April 5, 2014. As of the November 2016 distribution date, the CMBS certificates have amortized by 61% to $48.6 million from $125 million at issuance.

Stable Performance: Property performance has been stable as exhibited by strong occupancy, improving cash flow, and stable tenancy with limited upcoming rollover. Occupancy has improved to 98.8% as of September 2016 from 95% at issuance. Property-level net cash flow in 2015 grew 4.9% from 2014 and 10.2% from 2013. For the nine months ended Sept. 30, 2016, the net cash flow debt service coverage ratio was 1.34x, compared to 1.36x at year-end (YE) 2015, 1.39x at YE 2014 and 1.34x at YE 2013.

Stable Tenancy: The four largest tenants occupy approximately 74% of the property, all with leases expiring in 2022 and beyond, as well as additional lease renewal options. The largest tenants include Moody's Corporation (46% of total property square footage; lease expiry November 2027), Wilmer Hale LLP (12.2%; August 2032), Royal Bank of Scotland (8%; November 2022) and MSCI, Inc. (7.3%; January 2033). There is limited near-term rollover risk with 1.2% of the net rentable area rolling during the remainder of 2016, 4.7% in 2017, 5.5% in 2018 and less than 1% in 2019, according to the September 2016 rent roll.

High Quality Manhattan Asset: The 52-story, class A office building totaling approximately 1.7 million square feet is located in the Downtown Manhattan submarket and is in close proximity to various modes of major transportation. The building, which was completed in 2006, is Gold LEED certified and includes many innovative and environmentally friendly features and safety enhancements.

Amortization: No balloon risk exists as both the liberty bonds and CMBS certificates fully amortize by their respective maturity dates following initial IO periods.

Experienced Sponsorship and Property Management: Loan proceeds were used to refinance prior liberty bonds, pay closing costs, and return preferred equity investment to the sponsor, Larry A. Silverstein, the president and co-CEO of Silverstein Properties, Inc. (SPI). SPI has developed, owned, and managed more than 35 million sf of commercial, residential, and retail space and is involved with the extensive rebuilding and redevelopment of many buildings within the World Trade Center site.

Leasehold Interest: The property is subject to a ground lease that expires in December 2026, with three additional 20-year renewal options.

Single Asset: The transaction is secured by a single asset and is more susceptible to single event risk related to the market, sponsor, or the largest tenants occupying the property.

RATING SENSITIVITIES

The Rating Outlook for all classes remains Stable. No rating actions are anticipated unless there are material changes in property occupancy or cash flow. Property performance is consistent with issuance.

USE OF THIRD-PARTY DUE DILIGENCE PURSUANT TO SEC RULE 17G-10

No third-party due diligence was provided or reviewed in relation to this rating action.

Fitch has affirmed the following classes:

--$18.5 million class 1 maturing on Sept. 15, 2028 at 'AAAsf'; Outlook Stable;

--$19.4 million class 1 maturing on Sept. 15, 2029 at 'AAAsf'; Outlook Stable;

--$20.4 million class 1 maturing on Sept. 15, 2030 at 'AAAsf'; Outlook Stable;

--$21.4 million class 1 maturing on Sept. 15, 2031 at 'AAAsf'; Outlook Stable;

--$22.5 million class 1 maturing on Sept. 15, 2032 at 'AAAsf'; Outlook Stable;

--$73.7 million class 1 maturing on Sept. 15, 2035 at 'AAAsf'; Outlook Stable;

--$137.2 million class 1 maturing on Sept. 15, 2040 at 'AAAsf'; Outlook Stable;

--$108 million class 2 at 'Asf'; Outlook Stable;

--$29.2 million class 3 at 'BBBsf'; Outlook Stable;

--$38.1 million class A at 'BBB-sf'; Outlook Stable;

--$10.5 million class B at 'BB+sf'; Outlook Stable.

Additional information is available at www.fitchratings.com

Applicable Criteria

Counterparty Criteria for Structured Finance and Covered Bonds (pub. 01 Sep 2016)

https://www.fitchratings.com/site/re/886006

Criteria for Analyzing Large Loans in CMBS (pub. 01 Dec 2016)

https://www.fitchratings.com/site/re/890892

Global Structured Finance Rating Criteria (pub. 27 Jun 2016)

https://www.fitchratings.com/site/re/883130

Additional Disclosures

Dodd-Frank Rating Information Disclosure Form

https://www.fitchratings.com/creditdesk/press_releases/content/ridf_frame.cfm?pr_id=1016530

Solicitation Status

https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=1016530

Endorsement Policy

https://www.fitchratings.com/regulatory

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTPS://WWW.FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEB SITE AT WWW.FITCHRATINGS.COM. PUBLISHED RATINGS, CRITERIA, AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE, AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE CODE OF CONDUCT SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.

Copyright © 2016 by Fitch Ratings, Inc., Fitch Ratings Ltd. and its subsidiaries. 33 Whitehall Street, NY, NY 10004. Telephone: 1-800-753-4824, (212) 908-0500. Fax: (212) 480-4435. Reproduction or retransmission in whole or in part is prohibited except by permission. All rights reserved. In issuing and maintaining its ratings and in making other reports (including forecast information), Fitch relies on factual information it receives from issuers and underwriters and from other sources Fitch believes to be credible. Fitch conducts a reasonable investigation of the factual information relied upon by it in accordance with its ratings methodology, and obtains reasonable verification of that information from independent sources, to the extent such sources are available for a given security or in a given jurisdiction. The manner of Fitch’s factual investigation and the scope of the third-party verification it obtains will vary depending on the nature of the rated security and its issuer, the requirements and practices in the jurisdiction in which the rated security is offered and sold and/or the issuer is located, the availability and nature of relevant public information, access to the management of the issuer and its advisers, the availability of pre-existing third-party verifications such as audit reports, agreed-upon procedures letters, appraisals, actuarial reports, engineering reports, legal opinions and other reports provided by third parties, the availability of independent and competent third-party verification sources with respect to the particular security or in the particular jurisdiction of the issuer, and a variety of other factors. Users of Fitch’s ratings and reports should understand that neither an enhanced factual investigation nor any third-party verification can ensure that all of the information Fitch relies on in connection with a rating or a report will be accurate and complete. Ultimately, the issuer and its advisers are responsible for the accuracy of the information they provide to Fitch and to the market in offering documents and other reports. In issuing its ratings and its reports, Fitch must rely on the work of experts, including independent auditors with respect to financial statements and attorneys with respect to legal and tax matters. Further, ratings and forecasts of financial and other information are inherently forward-looking and embody assumptions and predictions about future events that by their nature cannot be verified as facts. As a result, despite any verification of current facts, ratings and forecasts can be affected by future events or conditions that were not anticipated at the time a rating or forecast was issued or affirmed.

The information in this report is provided “as is” without any representation or warranty of any kind, and Fitch does not represent or warrant that the report or any of its contents will meet any of the requirements of a recipient of the report. A Fitch rating is an opinion as to the creditworthiness of a security. This opinion and reports made by Fitch are based on established criteria and methodologies that Fitch is continuously evaluating and updating. Therefore, ratings and reports are the collective work product of Fitch and no individual, or group of individuals, is solely responsible for a rating or a report. The rating does not address the risk of loss due to risks other than credit risk, unless such risk is specifically mentioned. Fitch is not engaged in the offer or sale of any security. All Fitch reports have shared authorship. Individuals identified in a Fitch report were involved in, but are not solely responsible for, the opinions stated therein. The individuals are named for contact purposes only. A report providing a Fitch rating is neither a prospectus nor a substitute for the information assembled, verified and presented to investors by the issuer and its agents in connection with the sale of the securities. Ratings may be changed or withdrawn at any time for any reason in the sole discretion of Fitch. Fitch does not provide investment advice of any sort. Ratings are not a recommendation to buy, sell, or hold any security. Ratings do not comment on the adequacy of market price, the suitability of any security for a particular investor, or the tax-exempt nature or taxability of payments made in respect to any security. Fitch receives fees from issuers, insurers, guarantors, other obligors, and underwriters for rating securities. Such fees generally vary from US$1,000 to US$750,000 (or the applicable currency equivalent) per issue. In certain cases, Fitch will rate all or a number of issues issued by a particular issuer, or insured or guaranteed by a particular insurer or guarantor, for a single annual fee. Such fees are expected to vary from US$10,000 to US$1,500,000 (or the applicable currency equivalent). The assignment, publication, or dissemination of a rating by Fitch shall not constitute a consent by Fitch to use its name as an expert in connection with any registration statement filed under the United States securities laws, the Financial Services and Markets Act of 2000 of the United Kingdom, or the securities laws of any particular jurisdiction. Due to the relative efficiency of electronic publishing and distribution, Fitch research may be available to electronic subscribers up to three days earlier than to print subscribers.

For Australia, New Zealand, Taiwan and South Korea only: Fitch Australia Pty Ltd holds an Australian financial services license (AFS license no. 337123) which authorizes it to provide credit ratings to wholesale clients only. Credit ratings information published by Fitch is not intended to be used by persons who are retail clients within the meaning of the Corporations Act 2001

View source version on businesswire.com: http://www.businesswire.com/news/home/20161215005804/en/

Fitch Ratings
Primary Analyst
Melissa Che
Director
+1-212-612-7862
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Committee Chairperson
Mary MacNeill
Managing Director
+1-212-908-0785
or
Media Relations
Sandro Scenga, +1 212-908-0278
[email protected]

Source: Fitch Ratings

---

Serious News for Serious Traders! Try StreetInsider.com Premium Free!

---

You May Also Be Interested In

• Lantern Pharma receives USPTO patent allowance for LP-184 biomarker
• USA Rare Earth acquires minority stake in French rare earth firm Carester
• Syntec Optics added to Russell 3000 index