Fitch Takes Various Actions on MLMT 2004-MKB1

NEW YORK--(BUSINESS WIRE)-- Fitch Ratings has upgraded three and affirmed five classes of Merrill Lynch Mortgage Trust (MLMT) 2004-MKB1 commercial mortgage pass-through certificates. A detailed list of rating actions follows at the end of this press release.

KEY RATING DRIVERS

The upgrades and affirmations reflect increased credit enhancement from paydown and stable performance since the last review. Approximately 49.3% of the pool is currently defeased and is expected to pay off in November. Fitch modeled losses of 15.5% of the remaining pool; expected losses on the original pool balance total 1.75%, including $10.2 million (1.1% of the original pool balance) in realized losses to date.

As of the April 2015 distribution date, the pool's aggregate principal balance has been reduced by 95.5% to $44.5 million from $980 million at issuance. There are 9 loans remaining in the pool; three are defeased (49.3% of pool), four have been designated as Fitch loans of concern (45.6%), and one (18% of the pool) is in special servicing. The maturities of the non-specially serviced assets are collectively 63.7% in 2015, and 12% in 2019. Interest shortfalls are currently affecting classes M through Q.

Port Columbus IV, the largest contributor to expected losses is a specially-serviced asset (18% of the pool) comprising of a 104,169 square foot (sf) office property located in Columbus, OH. The loan transferred to special servicing in February 2012 for imminent default. In May 2012 a receiver was appointed to lease and manage the property. Foreclosure was completed in September 2013. Occupancy at Year-End (YE) 2013 was 50%, down from the previous 59% and 85% as of YE 2012 and YE 2011, respectively. However, per the special servicer, occupancy has recently rebounded to 68%.

RATING SENSITIVITIES

Upgrades to classes H, J, and K are supported by increased credit enhancement due to scheduled paydown and the percentage of defeased loans in the remaining pool (49.3% of the pool). Class L is affirmed due to increasing pool concentration and limited near-term paydown. The distressed classes (those rated below B) may be subject to downgrades should realized losses be greater than Fitch's expectations.

Fitch upgrades the following classes as indicated:

--$11 million class H to 'AAAsf' from 'AAsf'; Outlook Stable;

--$3.7 million class J to 'AAAsf' from 'Asf'; Outlook Stable;

--$4.9 million class K to 'BBBsf' from 'BBsf'; Outlook Stable;

Fitch affirms the following classes as indicated:

--$5.7 million class G at 'AAAsf'; Outlook Stable;

--$4.9 million class L at 'Bsf'; Outlook Stable;

--$4.9 million class M at 'CCCsf', RE 100%;

--$2.5 million class N at 'CCsf', RE 100%;

--$3.7 million class P at 'Csf', RE 0%.

The class A-1, A-2, A-3, A-4, A-1A, B, C, D, E and F certificates have paid in full. Fitch does not rate the class Q certificates. Fitch previously withdrew the ratings on the interest-only class XC and XP certificates.

Additional information on Fitch's criteria for analyzing U.S. CMBS transactions is available in the Dec. 10, 2014 report, 'U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria', which is available at 'www.fitchratings.com' under the following headers:

Structured Finance >> CMBS >> Criteria Reports

Additional information is available at 'www.fitchratings.com'.

Applicable Criteria and Related Research:

--'Global Structured Finance Rating Criteria' (March 2015);

--'U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria' (Dec. 10, 2014).

Applicable Criteria and Related Research:

Global Structured Finance Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=864268

U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=812608

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=983512

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.

Fitch Ratings
Primary Analyst:
Benson Thomas, +1-212-908-0645
Director
Fitch Ratings, Inc.
33 Whitehall St.
New York, NY 10004
or
Committee Chairperson:
Mary MacNeill
Managing Director
+1-212-908-0785
or
Sandro Scenga, +1-212-908-0278
Media Relations, New York
[email protected]

Source: Fitch Ratings

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