Fitch Upgrades One Class of WBCMT 2005-C20

CHICAGO--(BUSINESS WIRE)-- Fitch Ratings has upgraded one class and affirmed the remaining classes of Wachovia Bank Commercial Mortgage Trust (WBCMT) series 2005-C20 commercial mortgage pass-through certificates. A detailed list of rating actions follows at the end of this release

KEY RATING DRIVERS

The upgrade of class H is due to significant paydown. The class is now fully covered by defeased collateral and is expected to pay in full within the next 60 days. The affirmations of the distressed ratings are due to continued concerns with potential losses, most of which are a result of potential occupancy and disposition issues with the largest loan in the pool (94.6%).

As of the May 2016 distribution date, the pool's aggregate principal balance has been reduced by 98.0% (including 4.7% of realized losses) to $72.3 million from $3.663 billion at issuance. Cumulative interest shortfalls in the amount of $5.6 million are currently affecting classes P through G.

Of the original 211 loans, four remain, one of which (94.6%) is in special servicing. The non-specially serviced loans have maturity dates in 2017 (1.7%) and 2020 (3.6%). Two loans (3.6%) are fully amortizing, and two of the remaining loans (4.8%) are defeased.

The largest loan in the pool is the specially serviced $68.4 million loan secured by the NGP Rubicon GSA Pool (94.6% of the outstanding pool balance). The portfolio consists of nine properties primarily occupied by federal agencies via General Service Administration (GSA) leases. Several properties are single-tenanted. Overall occupancy has declined to 92% as of March 2015, compared to 100% at the end of 2012. Two properties are now 100% vacant following GSA lease expirations, which include a 182,554 square foot (sf) office building in Kansas City, KS (6% of portfolio net rentable area [NRA]) that has been vacant since year-end 2012, and a 53,830 sf office building in Norfolk, VA (2% of portfolio NRA) that recently became vacant in December 2013. Leases for an additional 10% of the portfolio NRA are scheduled to mature within the next 18 months. The net operating income debt service coverage ratio (DSCR) declined to 0.85x for first quarter 2015, compared to 1.21x at year-end December 2013. Fitch applied a stressed valuation to the portfolio, as the properties' financials and appraisal reports were dated. The special servicer continues to evaluate the individual properties and determine a disposition strategy that maximizes the return to the trust.

The only performing non-defeased loan is secured by 15,213 sf neighbourhood retail center, Village Shops, located in Salem, MA. As of December 2015, the center was fully occupied with a DSCR of 1.48x. The center has a stable tenant roster with only one tenant lease expiration scheduled prior to 2020. The loan is fully amortizing with a projected maturity date of July 2020.

RATING SENSITIVITIES

Further upgrades of the distressed classes will be limited due to the uncertainty surrounding the ultimate resolution of the Rubicon GSA Pool. Upgrades are possible if more information becomes known on the Rubicon portfolio. Further downgrades are possible if the Rubicon portfolio's expected losses increase significantly.

DUE DILIGENCE USAGE

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

Fitch has upgraded the following ratings:

--$0.3 million class E to 'AAAsf' from 'Bsf'; Outlook Stable.

Fitch has affirmed the following class as indicated:

--$41.2 million class F at 'CCsf'; RE 90%;

--$30.7 million class G at 'Dsf'; RE 0%;

--$0.0 million class H at 'Dsf'; RE 0%;

--$0.0 million class J at 'Dsf'; RE 0%;

--$0.0 million class K at 'Dsf'; RE 0%;

--$0.0 million class L at 'Dsf'; RE 0%;

--$0.0 million class M at 'Dsf'; RE 0%;

--$0.0 million class N at 'Dsf'; RE 0%;

--$0.0 million class O at 'Dsf'; RE 0%;

Class P is unrated and reduced to zero due to losses realized on loans liquidated from the trust. Classes A-1, A-2, A-3SF, A-4, A-5, A-6A, A-6B, A-PB, A-7, A-1A, A-MFL, A-MFX, A-J, B, C, and D have repaid in full. Fitch previously withdrew the ratings on the interest-only classes X-P and X-C.

Additional information is available at www.fitchratings.com.

Applicable Criteria

Counterparty Criteria for Structured Finance and Covered Bonds (pub. 14 May 2014)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=744158

Global Structured Finance Rating Criteria (pub. 06 Jul 2015)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=867952

U.S. and Canadian Fixed-Rate Multiborrower CMBS Surveillance and U.S. Re-REMIC Criteria (pub. 13 Nov 2015)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=873395

Additional Disclosures

Dodd-Frank Rating Information Disclosure Form

https://www.fitchratings.com/creditdesk/press_releases/content/ridf_frame.cfm?pr_id=1005195

Solicitation Status

https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=1005195

Endorsement Policy

https://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/20160526006337/en/

Fitch Ratings
Primary Analyst
Jay Bullie, CFA
Associate Director
+1-312-368-2079
Fitch Ratings, Inc.
70 W. Madison Street
Chicago, IL 60602
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

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