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TEXT-S&P:Ratings on classes A to D of MLOX4 affirmed
Apr 19 -
-- MLOX4 is a multiborrower CMBS transaction that was arranged by Merrill Lynch Japan Securities.
-- We have reexamined and maintained our assessments for the likely collection amounts from the properties backing the transaction's four underlying loans after considering some factors, including the performance of these properties.
-- We have affirmed our ratings on the class A to D trust certificates issued under this transaction.
Standard & Poor's Ratings Services today said that it has affirmed its ratings on the class A to D trust certificates issued under the MLOX4 transaction (see list below).
In October 2010, we lowered our assumptions for the likely collection amounts from the properties backing one of the transaction's four underlying loans, which defaulted in February 2012, and the three other underlying loans, which are due to mature in May 2012. The former loan originally represented about 30%, and the other three loans about 37%, about 29%, and about 5%, of the total initial issuance amount of the trust certificates. Under our revised assumptions, we estimated the combined value of the properties that continue to back the former loan to be about 59%, and the combined values of the properties that continue to back each of the three other loans to be about 59%, about 62%, and about 70%, of our initial underwriting values. This time, we maintained our assessments for the likely collection amounts from all of these properties, given that the properties' cash flows have remained in line with the assumptions we made in October 2010. We today affirmed our ratings on classes A to D accordingly.
MLOX4 is a multiborrower commercial mortgage-backed securities (CMBS) transaction. The trust certificates were initially secured by four loans extended to four obligors. The loans were originally backed by 22 real estate trust certificates held by the four obligors. The transaction was arranged by Merrill Lynch Japan Securities Co. Ltd., and ORIX Asset Management & Loan Services Corp. acts as the servicer for this transaction.
The ratings reflect our opinion on the likelihood of the full and timely payment of interest and the ultimate repayment of principal by the transaction's legal final maturity date in May 2014 for the class A trust certificates, and the full payment of interest and ultimate repayment of principal by the legal final maturity date for the class B to D trust certificates.
STANDARD & POOR'S 17G-7 DISCLOSURE REPORT
SEC Rule 17g-7 requires an NRSRO, for any report accompanying a credit rating relating to an asset-backed security as defined in the Rule, to include a description of the representations, warranties and enforcement mechanisms available to investors and a description of how they differ from the representations, warranties and enforcement mechanisms in issuances of similar securities. The Rule applies to in-scope securities initially rated (including preliminary ratings) on or after Sept. 26, 2011.
If applicable, the Standard & Poor's 17g-7 Disclosure Report included in this credit rating report is available at
RELATED CRITERIA AND RESEARCH
"Japanese Structured Finance Scenario And Sensitivity Analysis: The Effects Of Major Macroeconomic Factors," April 6, 2012
"Methodology For Japanese CMBS Loan Analysis," March 12, 2007
"Methodology For Japanese CMBS Real Estate Evaluation," March 12, 2007
JPY42.6 billion floating-rate trust certificates due May 2014
Class Initial issue amount Coupon type
A A- (sf) JPY25.0 bil. Floating rate
B BB- (SF) JPY6.7 bil. Floating rate
C B- (sf) JPY6.7 bil. Floating rate
D CCC (sf) JPY4.2 bil. Floating rate
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