(The following statement was released by the rating agency) OVERVIEW
-- We lowered our rating to 'D (sf)' from 'CCC- (sf)' on class K from Banc of America Large Loan Inc.'s series 2006-BIX1, a U.S. CMBS transaction.
-- The downgrade reflects accumulated interest shortfalls that we believe will remain outstanding for the foreseeable future.
NEW YORK (Standard & Poor's) Oct. 9, 2012--Standard & Poor's Ratings Services today lowered its rating to 'D (sf)' from 'CCC- (sf)' on the class K commercial mortgage pass-through certificates from Banc of America Large Loan Inc.'s series 2006-BIX1, a U.S. commercial mortgage-backed securities (CMBS) transaction.
As of the Sept. 17, 2012, trustee remittance report, the pooled trust has three loans remaining totaling $172.3 million. The pooled trust had experienced monthly interest shortfalls totaling $80,780 due primarily to an interest rate modification for the Ballantyne Village loan. The interest shortfalls have affected all of classes subordinate to and including class K. Class K has experienced interest shortfalls for 10 consecutive months.
The Ballantyne Village loan, the smallest loan in the pool, has a trust balance of $31.5 million (18.3%) and a whole-loan balance of $50.0 million. The loan is secured by a 166,041-sq.-ft. class A lifestyle center in Charlotte, N.C. The loan was transferred to the special servicer, Bank of America N.A. (BofA), on July 9, 2009, after the borrower submitted a request to restructure the loan due to a decline in cash flow at the property because two of the largest tenants stopped paying rent. According to BofA, the loan was performing under a forbearance agreement effective March 15, 2011. Among other things, the forbearance agreement stipulates that the borrower will contribute cash under certain conditions and pay interest on $14.0 million of the $31.5 million trust balance. In addition, the agreement allowed interest on the remaining $17.5 million trust balance to be deferred, and the borrower had until Oct. 1, 2012 (end of forbearance period) to make the release payment as defined in the forbearance agreement or turn over title of the property to the trust. The borrower has agreed to release the title via a deed in lieu. The trust is scheduled to take title on Nov. 1, 2012. As a result, we expect the accumulated interest shortfalls to remain outstanding for the foreseeable future.
STANDARD & POOR'S 17G-7 DISCLOSURE REPORT
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RELATED CRITERIA AND RESEARCH
-- Banc of America Large Loan Inc. Series 2006-BIX1 Ratings Lowered On Four Classes; Six Other Ratings Affirmed, Dec. 21, 2011
-- Global Structured Finance Scenario And Sensitivity Analysis: The Effects Of The Top Five Macroeconomic Factors, Nov. 4, 2011
-- Rating U.S. CMBS In The Face Of Interest Shortfalls, Feb. 23, 2006
(New York Ratings Team)
((e-mail: pam.niimi@thomsonreuters.com; Reuters Messaging: pam.niimi.reuters.com@reuters.net; Tel:1-646-223-6330;))