TEXT-Fitch downgrades BACM 2004-6
June 8 - Fitch Ratings has downgraded four and affirmed 14 classes of Banc of America Commercial Mortgage Inc., commercial mortgage pass-through certificates, series 2004-6 (BACM 2004-6). A detailed list of rating actions follows at the end of this press release. The downgrades reflect an increase in Fitch modeled losses across the pool. Fitch modeled losses of 11% of the remaining pool; modeled losses of the original pool are at 6.6%, including losses already incurred to date. As of the May 2012 distribution date, the pool's certificate balance has been reduced by 40.5% (to $569.58 million from $956.59 million), of which 40.4% was due to paydowns and 0.1% was due to realized losses. Two loans, representing 2.4% of the pool, have been defeased. Fitch has designated 30 loans (66%) as Fitch Loans of Concern, which includes five specially serviced loans (6.9%). The largest contributor to modeled losses is a loan (8.3%) secured by 496,895 square feet of a 750,377 square foot (sf) regional mall located in Springfield, OH. The loan was previously transferred to special servicing in June 2010 for imminent default and was subsequently modified. The terms of the modification included the bifurcation of the loan into an A-note and a B-note and the extension of the loan's maturity date. The loan has since transferred back to the master servicer. Fitch views the B-note portion of the loan as a hope note. As of year-end (YE) 2011, occupancy at the property was stable at 87%. The second largest contributor to modeled losses is a loan (4.5%) secured by a 171,365 sf office property located in Los Angeles, CA. For YE 2011, the debt service coverage ratio was 0.48 times, on a net-operating income basis. As of the March 2012 rent roll, the property was 77% occupied. The second largest tenant (16% of the net rentable area) vacated the property when its lease expired at the end of 2011. Operating expenses at the property have been higher than expected since the loan's inception. YE 2011 operating expenses increased 14% when compared to YE 2010 and 144% when compared to issuance. The increase in operating expenses is the result of an increase in real estate taxes and insurance expenses. The third largest contributor to modeled losses is a specially serviced loan (2.8%) secured by a 359,462 sf mixed use property located in Tustin, CA. The property improvements include a 15-building business park, a single tenant 60,000 sf building, and a 579 unit self storage facility. The loan was transferred to special servicing in December 2011 for imminent default. The borrower indicated in a letter to the master servicer that they would no longer be able to support operating shortfalls. The special servicer and the borrower continue to discuss loan workout options. Fitch has downgraded and revised Rating Outlooks on the following classes as indicated: --$9.6 million class E to 'BBB-sf' from 'A-sf'; Outlook to Negative from Stable; --$14.3 million class F to 'Bsf' from 'BBB-sf'; Outlook Negative; --$9.6 million class G to 'B-sf' from 'BBsf'; Outlook Negative; --$13.2 million class H to 'CCCsf' from 'B-sf'; RE 0%. In addition, Fitch has affirmed the following classes: --$89.5 million class A-3 at 'AAAsf'; Outlook Stable; --$35.4 million class A-4 at 'AAAsf'; Outlook Stable; --$16.5 million class A-AB at 'AAAsf'; Outlook Stable; --$237.4 million class A-5 at 'AAAsf'; Outlook Stable; --$56.2 million class A-J at 'AAAsf'; Outlook Stable; --$19.1 million class B at 'AAsf'; Outlook Stable; --$9.6 million class C at 'AA-sf'; Outlook Stable; --$17.9 million class D at 'Asf'; Outlook Stable; --$6 million class J at 'CCCsf'; RE 0%; --$4.8 million class K at 'CCCsf'; RE 0%; --$4.8 million class L at 'CCCsf'; RE 0%; --$3.6 million class M at 'CCsf'; RE 0%; --$3.6 million class N at 'Csf'; RE 0%; --$4.8 million class O at 'Csf'; RE 0%. Classes A-1 and A-2 have paid in full. Fitch does not rate class P. Fitch had previously withdrawn the rating on the interest-only classes X-C and X-P. (For additional information on the withdrawal of the rating on the interest-only class, see 'Fitch Revises Practice for Rating IO & Pre-Payment Related Structured Finance Securities', dated June 23, 2010.) Additional information is available at 'www.fitchratings.com'. The ratings above were solicited by, or on behalf of, the issuer, and therefore, Fitch has been compensated for the provision of the ratings. Applicable Criteria and Related Research: --'Global Structured Finance Rating Criteria' (Aug. 4, 2011); --'Surveillance Methodology for U.S. Fixed-Rate CMBS Transactions' (Dec. 21, 2011). Applicable Criteria and Related Research: Global Structured Finance Rating Criteria Surveillance Methodology for U.S. Fixed-Rate CMBS Transactions
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