TEXT-S&P rating actions on Column Canada Issuer 2006-WEM

Tue Nov 20, 2012 5:03pm EST

(The following statement was released by the rating agency)
OVERVIEW
     -- We raised our ratings on eight classes from Column Canada Issuer 
Corp.'s series 2006-WEM, a Canadian CMBS transaction, and removed them from 
CreditWatch with positive implications.
     -- Concurrently, we lowered our rating on class K and removed it from 
CreditWatch with negative implications and affirmed our 'AAA (sf)' ratings on 
three other classes from the same transaction. 
     -- The collateral in this stand-alone transaction consists of a 
fixed-rate amortizing first mortgage bond.
     -- The rating actions reflect our analysis of the transaction, which 
included our revaluation of the collateral and follows our analysis of the 
transaction using our recently updated criteria for rating U.S. and Canadian 
CMBS transactions.
 
NEW YORK (Standard & Poor's) Nov. 20, 2012--Standard & Poor's Ratings Services 
today raised its ratings on eight classes of multiclass pass-through 
certificates from Column Canada Issuer Corp.'s series 2006-WEM, a Canadian 
commercial mortgage-backed securities (CMBS) transaction, and removed them 
from CreditWatch with positive implications, where we placed them on Sept. 5, 
2012. Concurrently, we lowered our rating on class K and removed it from 
CreditWatch with negative implications. In addition, we affirmed our 'AAA 
(sf)' ratings on three other classes from the same transaction (see list). 

The rating actions follow our analysis of the transaction using our recently 
updated criteria for rating U.S. and Canadian CMBS transactions, and the 
application of the criteria was the primary driver of the rating actions. The 
analysis of stand-alone (single borrower) transactions is predominantly a 
recovery-based approach that assumes a loan default. Reflecting this approach, 
our property-level analysis included a revaluation of the shopping and 
entertainment complex totaling 4.2 million sq. ft. (which includes a 2.5 
million-sq.-ft. super regional mall, a 12-story, 355-room hotel, and 
entertainment and amusement facilities totaling 557,037 sq. ft.) in Edmonton, 
Alberta, Canada securing the first mortgage bond in the trust. Based on our 
analysis, we derived our sustainable net cash flow, which we then divided by a 
weighted average capitalization rate of 6.93% to determine our expected-case 
value. This yielded a loan-to-value ratio of 54.6%.

We based the downgrade of class K to 'BB+ (sf)' on our recently updated 
criteria for rating U.S. and Canadian CMBS transactions, which applies a 
credit enhancement minimum equal to 1% of the transaction or loan amount to 
address the potential for unexpected trust expenses that may be incurred 
during the life of the loan or transaction. These potential unexpected trust 
expenses may include servicer fees, servicer advances, workout or corrected 
mortgage fees, and potential trust legal fees.

The affirmed 'AAA (sf)' ratings on the principal and interest certificate 
classes reflect subordination and liquidity support levels that are consistent 
with the outstanding ratings. We affirmed our 'AAA (sf)' rating on the class 
A-X interest-only (IO) certificates based on our current criteria.

We based our analysis, in part, on a review of the borrower's operating 
statements for the collateral for the years ended July 31, 2012 and 2011, and 
the July and October 2012, rent rolls for the retail portion. The reported 
occupancy was 91.7% as of the Oct. 15, 2012, rent roll for the retail portion 
and 76.9% according to the July 31, 2012, borrower's statements for the hotel 
portion. The master servicer, Midland Loan Services, reported a debt service 
coverage (DSC) of 2.18x for the year ended July 31, 2012. 

As of the Nov. 15, 2012, trustee remittance report, the first mortgage bond 
has a trust and whole-loan balance of C$565.4 million. The first mortgage bond 
amortizes on a 30-year schedule, with IO payments for the first two years, and 
pays interest based on 5.66% per annum. The mortgage bond matures on Sept. 15, 
2016.

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 Reports included in this 
credit rating report are available at 
"here"


RELATED CRITERIA 
 
     -- Rating Methodology And Assumptions For U.S. And Canadian CMBS, Sept. 
5, 2012
     -- CMBS Global Property Evaluation Methodology, Sept. 5, 2012
     -- Global Methodology For Rating Interest-Only Securities, April 15, 2010
     -- U.S. CMBS Legal And Structured Finance Criteria: Property-Specific And 
Large Loan Transactions, May 1, 2003
 
RELATED RESEARCH
     -- Industry Economic and Ratings Outlook: U.S. Commercial Real Estate 
Trends Are Improving And CMBS Performance Is Stabilizing, Nov. 5, 2012
     -- U.S. And Canada CMBS Tranches Affected By The Sept. 5, 2012, 
CreditWatch Placements, Sept. 5, 2012
     -- Application of CMBS Global Property Evaluation Methodology In U.S. and 
Canadian Transactions Property Commentary, Sept. 5, 2012
     -- The Application Of Standard & Poor's Revised U.S. And Canadian CMBS 
Criteria For The Sept. 5, 2012, CreditWatch Actions, Sept. 5, 2012

RATINGS RAISED AND REMOVED FROM CREDITWATCH POSITIVE

Column Canada Issuer Corp.
Multiclass pass-through certificates series 2006-WEM
                 Rating
Class     To             From       
B         AAA (sf)       AA+ (sf)/Watch Pos
C         AAA (sf)       AA (sf)/Watch Pos
D         AAA (sf)       AA- (sf)/Watch Pos
E         AA+ (sf)       A+ (sf)/Watch Pos
F         AA (sf)        A (sf)/Watch Pos
G         A+ (sf)        A- (sf)/Watch Pos
H         A- (sf)        BBB+ (sf)/Watch Pos
J         BBB+ (sf)      BBB (sf)/Watch Pos    

RATING LOWERED AND REMOVED FROM CREDITWATCH NEGATIVE

Column Canada Issuer Corp.
Multiclass pass-through certificates series 2006-WEM
                 Rating
Class     To             From       
K         BB+ (sf)       BBB- (sf)/Watch Neg

RATINGS AFFIRMED

Column Canada Issuer Corp.
Multiclass pass-through certificates series 2006-WEM
Class     Rating 
A-1       AAA (sf)
A-2       AAA (sf)
A-X       AAA (sf)

 (New York Ratings Team)
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