TEXT-S&P cuts, affirms GS Mortgage Securities II 2005-ROCK

Fri Dec 7, 2012 12:42pm EST

(The following statement was released by the rating agency)
OVERVIEW
     -- We lowered our rating on class J from GS Mortgage Securities Corp. 
II's series 2005-ROCK, a U.S. CMBS transaction and removed it from CreditWatch 
with negative implications. 
     -- In addition, we affirmed our ratings on 11 other classes from the same 
transaction and removed seven of them from CreditWatch with negative 
implications. 
     -- The collateral in this stand-alone transaction consists of a 
fixed-rate interest-only mortgage loan. 
     -- 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) Dec. 7, 2012--Standard & Poor's Ratings Services 
today lowered its rating on the class J trust pass-through certificates from 
GS Mortgage Securities Corp. II's series 2005-ROCK, a U.S. commercial 
mortgage-backed securities (CMBS) transaction, and removed it from CreditWatch 
with negative implications. At the same time, we affirmed our ratings on 11 
other classes and removed seven of them from CreditWatch with negative 
implications, where we placed them on Sept. 5, 2012 (see list). 

Today's 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 a portfolio of 12 
individual office/retail properties and plaza totaling 6.6 million sq. ft. in 
midtown Manhattan (Rockefeller Center). The mortgage loan in the trust is 
secured by a first priority mortgage (up to a maximum of $1.21 billion) on the 
fee and leasehold interests of the borrower in Rockefeller Center and a first 
priority pledge of all of the equity interests in the borrower. Based on our 
analysis, we derived our sustainable net cash flow, which we then divided by a 
capitalization rate of 6.25% to determine our expected-case value. This 
yielded a loan-to-value ratio of 42.1%. 

We based the downgrade of class J 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 ratings on the principal and interest certificate classes reflect 
subordination and liquidity support levels that are consistent with the 
outstanding ratings. We tempered our rating actions because the mortgage is 
recorded at $1.21 billion and the maximum amount recoverable in a mortgage 
foreclosure action may not be sufficient to repay the loan. Any amount over 
$1.21 billion would be considered unsecured debt of the borrower. 
Additionally, in connection with a foreclosure on the equity pledge before a 
foreclosure on the mortgage, significant real property transfer tax would be 
payable by the trust because the resulting transfer would be treated as a 
transfer of property under New York law. 

We affirmed our 'AAA (sf)' rating on the class X-1 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 office/retail properties for the nine months 
ended Sept. 30, 2012, year-end 2011 and 2010, and the June 2012 rent rolls. 
The master servicer, Wells Fargo Bank N.A., reported an overall occupancy of 
94.1% as of June 30, 2012, and a debt service coverage of 2.23x for the same 
reporting period. 

As of the Dec. 3, 2012, trustee remittance report, the mortgage loan has a 
trust and whole loan balance of $1.685 billion. In addition, the equity 
interests in the borrower of the whole loan secure a subordinate mezzanine 
loan totaling $320.0 million. The mortgage loan is IO, pays interest based on 
5.6435% per annum, and matures on May 1, 2025. 

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 Canadian CMBS Ratings Affected By The Sept. 5, 2012, 
CreditWatch Actions, Sept. 5, 2012
     -- Application of CMBS Global Property Evaluation Methodology In U.S. and 
Canadian Transactions, 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

RATING LOWERED AND REMOVED FROM CREDITWATCH NEGATIVE

GS Mortgage Securities Corp. II
Trust pass-through certificates series 2005-ROCK
               Rating
Class     To             From       
J         BB+ (sf)       A- (sf)/Watch Neg

RATINGS AFFIRMED AND REMOVED FROM CREDITWATCH NEGATIVE

GS Mortgage Securities Corp. II
Trust pass-through certificates series 2005-ROCK
               Rating
Class     To            From       
A         AAA (sf)      AAA (sf)
A-FL      AAA (sf)      AAA (sf)
B         AAA (sf)      AAA (sf)
C-1       AAA (sf)      AAA (sf)/Watch Neg
C-2       AAA (sf)      AAA (sf)/Watch Neg
D         AAA (sf)      AAA (sf)/Watch Neg
E         AA+ (sf)      AA+ (sf)/Watch Neg
F         AA (sf)       AA (sf)/Watch Neg
G         A+ (sf)       A+ (sf)/Watch Neg
H         A (sf)        A (sf)/Watch Neg
X-1       AAA (sf)      AAA (sf)

Primary Credit Analyst: Della Cheung, New York (1) 212-438-1000;
                        della_cheung@standardandpoors.com
Secondary Credit Analyst: Barbara A Hoeltz, New York (1) 212-438-1000;
                          barbara_hoeltz@standardandpoors.com


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 (New York Ratings Team)
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