Fitch Affirms LB-UBS 2007-C1

NEW YORK--(BUSINESS WIRE)-- Fitch Ratings has affirmed 16 classes of LB-UBS Commercial Mortgage Trust commercial mortgage pass-through certificates, series 2007-C1. A detailed list of rating actions follows at the end of this release.

KEY RATING DRIVERS

The affirmations reflect continued paydown and stable performance since Fitch's last rating action. Fitch remains concerned over the refinance risk associated with loans representing 78% of the pool's current balance maturing in January and February of 2017.

As of the October 2016 distribution date, the pool's aggregate principal balance has been reduced by 54.4% to $1.7 billion from $3.7 billion at issuance. Per servicer reporting, 19 loans are fully defeased (15.8% of the current balance). There are 12 loans (6.4%) with the special servicer. Interest shortfalls are currently affecting classes H through T.

Underperforming Top Five Loan: The Del Amo Financial Center loan (3.1% of the pool) is secured by a 348,185 square foot (sf) office complex located in Torrance, CA. The complex consists of six separate office buildings. As of the December 2015 rent roll, the property was 54% occupied with a servicer reported net operating income (NOI) debt service coverage ratio (DSCR) of 0.36x. The property was acquired by The Muller Company and GreenOak Real Estate in June 2015. Per servicer reporting, the new sponsors have invested significant capital to improve the quality of the property and have been working closely with a team of brokers to lease the vacant space. Fitch will continue to monitor the loan for performance improvement and lease updates.

Increase in Specially Serviced Loans: The number of specially serviced loans has increased to 12 from 10 at Fitch's prior review. All loans are in tertiary markets with high levels of submarket vacancy.

Concentrated Pool: The pool's three largest loans account for 47.5% of the current balance of the pool. All three loans mature in January 2017.

High Percentage of Interest-Only Loans: Full Term Interest-Only loans account for 75.6% of the pool's current balance.

RATING SENSITIVITIES

The Rating Outlooks on all classes remain Stable. Further upgrades are unlikely until there is an indication of the number of loans that will repay in January and February of 2017. Downgrades are possible if there is an increase in the number of specially serviced loans and modeled losses are realized.

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 ratings:

--$398.3 million class A-4 at 'AAAsf'; Outlook Stable;

--$361.3 million class A-1A at 'AAAsf'; Outlook Stable;

--$371.3 million class A-M at 'AAsf'; Outlook Stable;

--$315.6 million class A-J at 'BBsf'; Outlook Stable;

--$27.8 million class B at 'Bsf'; Outlook Stable;

--$55.7 million class C at 'CCsf'; RE to 85% from 50%;

--$37.1 million class D at 'CCsf'; RE 0%;

--$18.6 million class E at 'CCsf'; RE 0%;

--$32.5 million class F at 'Csf'; RE 0%;

--$32.5 million class G at 'Csf'; RE 0%;

--$41.8 million class H at 'Csf'; RE 0%;

--$14.4 million class J at 'Dsf'; RE 0%;

--$0 million class K at 'Dsf'; RE 0%;

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

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

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

The class A-1, A-2, A-3, A-AB certificates have all paid in full. Fitch does not rate the class P, Q, S, T, or BMP certificates. Fitch previously withdrew the rating on the interest-only class X-CL, X-CP, and X-W certificates.

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 Rating Caps and Limitations in Global Structured Finance Transactions (pub. 16 Jun 2016)

https://www.fitchratings.com/site/re/882401

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

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

U.S. and Canadian Multiborrower CMBS Surveillance Criteria (pub. 11 Nov 2016)

https://www.fitchratings.com/site/re/889634

Additional Disclosures

Dodd-Frank Rating Information Disclosure Form

https://www.fitchratings.com/creditdesk/press_releases/content/ridf_frame.cfm?pr_id=1014902

Solicitation Status

https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=1014902

Endorsement Policy

https://www.fitchratings.com/regulatory

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Copyright (c) 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.

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View source version on businesswire.com: http://www.businesswire.com/news/home/20161116006633/en/

Fitch Ratings
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Zachary Johnson
Associate Director
+1-646-582-4815
Fitch Ratings, Inc.
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New York, NY 10004
or
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or
Media Relations
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[email protected]

Source: Fitch Ratings

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