Fitch Upgrades Three Classes of LB-UBS 2003-C1

NEW YORK--(BUSINESS WIRE)-- Fitch Ratings has upgraded three classes and affirmed two classes of LB-UBS Commercial Mortgage Trust commercial mortgage pass-through certificates series 2003-C1. A detailed list of rating actions follows at the end of this press release.

KEY RATING DRIVERS

The upgrades and affirmations are the result of the continued paydown of the transaction and increased credit enhancement. As of the October 2015 distribution date, the pool's aggregate principal balance has been reduced by 97.8% to $29.9 million from $1.37 billion at issuance. No loans are defeased.

Fitch modeled losses of 4.3% of the remaining pool; expected losses on the original pool balance total 1.3%, including $17.1 million (1.3% of the original pool balance) in realized losses to date. There are five loans remaining in the pool, one loan (4.9%) is considered a Fitch Loan of Concern. There are no specially serviced loans. Interest shortfalls are currently affecting classes Q through T.

The largest loan (43.9%) is secured by a 139,256 square foot (sf) retail property in Dallas, TX. The largest tenants are Albertson's (42%), Mi Cocina (5%), and Bank of America (3%). Occupancy increased at the property to 97% as of year-end (YE) 2014 from 92% YE 2013. Additionally, the servicer reported debt service coverage ratio (DSCR) showed an increase to 1.52x as of YE 2014 from 1.43x as of YE 2013. The loan is scheduled to mature in December 2017.

The second largest loan (40%) is secured by a 136,528 sf retail property in Fort Worth, TX. The largest tenants include Babies R' Us (29%), Petco (11%), and Car Toys (5%). The servicer reported an increased DSCR to 1.88x at YE 2014 from 1.74x at YE 2013. The loan is scheduled to mature in December 2017.

The remaining loans are all secured by single-tenant Rite Aid Stores located in CA, NH, and NJ; the loans are fully amortizing and mature in 2021. Rite Aid is currently rated 'B' on Rating Watch Positive by Fitch.

RATING SENSITIVITIES

The Rating Outlooks for all classes are stable. Further upgrades are not likely due to the concentrated nature of the pool. Downgrades are not likely as the loans benefit from amortization.

DUE DILIGENCE USAGE

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

Fitch has upgraded the following ratings:

--$5.8 million class M notes to 'AAAsf' from 'BBBsf'; Outlook Stable;

--$6.9 million class N notes to 'BBBsf' from 'BBsf'; Outlook Stable;

--$10.3 million class P notes to 'BBsf' from 'Bsf'; Outlook Stable.

Fitch has affirmed the following ratings:

--$5.1 million class Q notes at 'Bsf'; Outlook Stable;

--$1.8 million class S notes at 'Dsf'; RE 0%.

The class A-1, A-2, A-3, A-4, A-1b, B, C, D, E, F, G, H, J, K, L and XCP certificates have paid in full. Fitch does not rate the class T certificates. Fitch previously withdrew the rating on the interest-only class X-CL 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 Form

https://www.fitchratings.com/creditdesk/press_releases/content/ridf_frame.cfm?pr_id=993487

Solicitation Status

https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=993487

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/20151105006209/en/

Fitch Ratings
Primary Analyst
Zachary Johnson
Associate Director
+1-646-582-4815
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

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