(The following statement was released by the rating agency)OVERVIEW
-- We lowered our rating to 'D (sf)' from 'CCC- (sf)' on class K fromBanc of America Large Loan Inc.'s series 2006-BIX1, a U.S. CMBS transaction.
-- The downgrade reflects accumulated interest shortfalls that we believewill remain outstanding for the foreseeable future.
NEW YORK (Standard & Poor's) Oct. 9, 2012--Standard & Poor's Ratings Servicestoday lowered its rating to 'D (sf)' from 'CCC- (sf)' on the class Kcommercial mortgage pass-through certificates from Banc of America Large LoanInc.'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 hasthree loans remaining totaling $172.3 million. The pooled trust hadexperienced monthly interest shortfalls totaling $80,780 due primarily to aninterest rate modification for the Ballantyne Village loan. The interestshortfalls 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 trustbalance 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 inCharlotte, N.C. The loan was transferred to the special servicer, Bank ofAmerica N.A. (BofA), on July 9, 2009, after the borrower submitted a requestto restructure the loan due to a decline in cash flow at the property becausetwo of the largest tenants stopped paying rent. According to BofA, the loanwas performing under a forbearance agreement effective March 15, 2011. Amongother things, the forbearance agreement stipulates that the borrower willcontribute cash under certain conditions and pay interest on $14.0 million ofthe $31.5 million trust balance. In addition, the agreement allowed intereston the remaining $17.5 million trust balance to be deferred, and the borrowerhad until Oct. 1, 2012 (end of forbearance period) to make the release paymentas defined in the forbearance agreement or turn over title of the property tothe 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 expectthe accumulated interest shortfalls to remain outstanding for the foreseeablefuture.
STANDARD & POOR'S 17G-7 DISCLOSURE REPORT
SEC Rule 17g-7 requires an NRSRO, for any report accompanying a credit ratingrelating to an asset-backed security as defined in the Rule, to include adescription of the representations, warranties and enforcement mechanismsavailable to investors and a description of how they differ from therepresentations, warranties and enforcement mechanisms in issuances of similarsecurities. The Rule applies to in-scope securities initially rated (includingpreliminary ratings) on or after Sept. 26, 2011.
If applicable, the Standard & Poor's 17g-7 Disclosure Reports included in thiscredit rating report are available at
RELATED CRITERIA AND RESEARCH
-- Banc of America Large Loan Inc. Series 2006-BIX1 Ratings Lowered OnFour Classes; Six Other Ratings Affirmed, Dec. 21, 2011
-- Global Structured Finance Scenario And Sensitivity Analysis: TheEffects 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)