Standard & Poor’s downgraded several CMBS transactions this week and said it expects to lower the ratings on more of these deals.
The ratings agency downgraded 19 ratings from 6 transaction based on current and potential interest shortfalls.
S&P lowered its ratings on 11 of these classes to ‘D’ because the accumulated interest shortfalls are likely to remain outstanding for the “foreseeable future.” These notes have had accumulated interest shortfalls outstanding for six to 10 months.
Bank of America Commercial Mortgage Trust's series 2008-1 had its class D, E, F, and G certificates downgrade. The class A-J, B, C, and D certificates from GMAC Commercial Mortgage Securities Inc.'s series 2006-C1 were also downgraded..
J.P. Morgan Chase Commercial Mortgage Securities Series 2005-LDP5 had the ratings on the class L and M certificates lowered. The class E and F certificates from LB-UBS Commercial Mortgage Trust's series 2006-C4 were also downgraded; as were the class E, F, G, and H certificates from LB-UBS Commercial Mortgage Trust's series 2007-C6.
Merrill Lynch Mortgage Trust, series 2006-C1 had the ratings on its class C, D, and E certificates lowered.
“We expect more non-investment grade CMBS downgrades due to reduced liquidity support, interest shortfalls and principal losses, as specially serviced loans are worked out, modified or liquidated,” said S&P.