Moody's may cut Maguire CMBS, including a benchmark

NEW YORK Aug 11 (Reuters) - Moody's Investors Service on Tuesday said it may cut ratings on portions of at least a dozen commercial mortgage-backed securities after landlord Maguire Properties Inc. said it would walk away from seven properties.

Among potential downgrades are to 17 classes of the Goldman Sachs Mortgage Securities Corporation II 2007-GG10 bond that is amongst the most-widely traded and considered a benchmark in the $700 billion CMBS market.

Maguire (MPG.N) is the sponsor of six loans in the CMBS, which represent 18 percent of the outstanding deal balance, Moody's said. Prices on the bond fell slightly on Tuesday, backing off a nearly five-month rally, in line with the entire CMBS market, a strategist said.

Maguire on Monday said two subsidiaries failed to make payments on mortgage loans associated with properties in Orange County and Los Angeles, and that its board had approved the disposal of the buildings to shore up its cash position.

It also said it will no longer fund the cash shortfall on the properties' mortgages [ID:nN10451709].

Six of the loans on buildings abandoned by Maguire were financed in the CMBS market at its peak, and cash flow from the properties depended on fates of some tenants tied to the home mortgage meltdown, including subprime mortgage lenders.

"Maguire continues to experience ongoing levels of high effective leverage, declining operating performance, and an inability to cover dividends from operating cash flow," Moody's said in a statement.

(Reporting by Al Yoon)