Fitch Affirms COMM 2004-LNB2

NEW YORK--(BUSINESS WIRE)-- Fitch Ratings has affirmed 12 classes of COMM Mortgage Trust 2004-LNB2 commercial mortgage pass-through certificates. A detailed list of rating actions follows at the end of this press release.

KEY RATING DRIVERS

The affirmations reflect stable performance of the remaining pool. There are five loans remaining, two are defeased (80.8% of the pool), including the largest (76.1%) and third largest loans (4.8%); and one loan is in special servicing (3.2%). The two defeased loans mature in December 2018 and January 2019, respectively. The two non-defeased, non-specially serviced loans (16.0%) continue to perform. Fitch modeled losses of 2.8% of the original pool balance, including 2.5% in realized losses to date.

As of the July 2015 distribution date, the pool's aggregate principal balance has been reduced by 91.8% to $79.1 million from $963.8 million at issuance including $23.98 million (2.5% of the original pool balance) in realized losses to date. Interest shortfalls are currently affecting classes K through P.

The specially-serviced loan is secured by a 59,933 square foot (sf) retail center located in Fort Worth, TX. The center is occupied by a mix of predominantly small local tenants with a few national tenants. The loan transferred to special servicing in January 2014 due to maturity default. Occupancy and debt service coverage ratio (DSCR) were 65.4% and 1.01x, respectively, as of year-to-date (YTD) August 2014. A foreclosure sale had been scheduled for Dec. 2, 2014; however, the borrower filed bankruptcy on Dec. 1, 2014, which postponed the sale.

The remaining performing loans are a multifamily property in Wilmington, NC and a single-tenant Walgreens store in College Station, TX. The multifamily property is reporting a 1.53x net operating income (NOI) DSCR and 89.6% occupancy as of year-end (YE) 2014. The loan matures in March 2019. The Walgreens asset is a fully amortizing loan with an April 2028 maturity.

RATING SENSITIVITIES

The Stable Rating Outlooks on classes C through J are the result of high credit enhancement due to pay down and defeasance. Although credit enhancement is high for class H relative to its rating, an upgrade is not expected until there is further certainty of resolution on the specially serviced loan.

DUE DILIGENCE USAGE

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

Fitch has affirmed the following ratings:

--$7.9 million class C at 'AAAsf'; Outlook Stable;

--$19.3 million class D at 'AAAsf'; Outlook Stable;

--$8.4 million class E at 'AAAsf'; Outlook Stable;

--$9.6 million class F at 'AAAsf'; Outlook Stable;

--$10.8 million class G at 'AAAsf'; Outlook Stable;

--$10.8 million class H at 'BBsf'; Outlook Stable;

--$4.8 million class J at 'Bsf'; Outlook Stable;

--$6 million class K at 'Csf'; RE 70%;

--$1.3 million class L at 'Dsf'; RE 0%;

--$0 class M at 'Dsf'; RE 0%;

--$0 class N at 'Dsf'; RE 0%;

--$0 class O at 'Dsf'; RE 0%.

The class A-1, A-2, A-3, A-4 and B certificates have paid in full. Fitch does not rate the class P certificates. Fitch previously withdrew the ratings on the interest-only class X-1 and X-2 certificates.

Additional information is available at www.fitchratings.com.

Applicable Criteria

Global Structured Finance Rating Criteria (pub. 06 Jul 2015)https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=867952

U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria (pub. 10 Dec 2014)https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=812608

Additional Disclosures

Dodd-Frank Rating Information Disclosure Formhttps://www.fitchratings.com/creditdesk/press_releases/content/ridf_frame.cfm?pr_id=987977

Solicitation Statushttps://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=987977

Endorsement Policyhttps://www.fitchratings.com/jsp/creditdesk/PolicyRegulation.faces?context=2&detail=31

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE '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.

View source version on businesswire.com: http://www.businesswire.com/news/home/20150715006465/en/

Fitch Ratings
Primary Analyst:
Martin Nunnally, +1-212-908-0871
Associate Director
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Committee Chairperson:
Mary MacNeill, +1-212-908-0785
Managing Director
or
Sandro Scenga, +1-212-908-0278
Media Relations, New York
[email protected]

Source: Fitch Ratings

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