Nov 28 -
-- MF2 Alpha is a CMBS transaction that Morgan Stanley Japan Securities
-- We consider the recovery prospect from the properties backing the
transaction's nonrecourse loan to be under downward pressure, given the status
of the sales of these properties.
-- We have lowered to 'CCC- (sf)' from 'CCC (sf)' our rating on MF2
Alpha's series 1 unsecured bonds.
Standard & Poor's Ratings Services today said that it has lowered to 'CCC- (sf)' from 'CCC
(sf)' its rating on the JPY7.0 billion series 1 unsecured bonds issued under the Godo Kaisha MF2
Alpha (MF2 Alpha) transaction in September 2008 (see list below).
The nonrecourse loan, which secures the class B asset-backed loan (ABL),
defaulted on its maturity date in March 2012. In line with collection method
stipulated in the transaction documents, sales activities for the three office
buildings in Tokyo that back the nonrecourse loan have begun but none of them
have yet been sold. We today lowered our ratings on the series 1 unsecured
bonds to reflect our view that the recovery prospect from the properties
backing the transaction's nonrecourse loan is under downward pressure, given
the status of the sales of these properties.
In the MF2 Alpha transaction, we assigned our ratings to the JPY7.0 billion
unsecured bonds that MF2 Alpha issued. A JPY7.0 billion ABL (class B ABL;
mezzanine loan) extended to Godo Kaisha MF2 (MF2) backs the bonds. The class B
ABL that backs the bonds is, in turn, backed by a nonrecourse loan. Four
properties initially secured this nonrecourse loan, which MF2, serving as the
lending special-purpose company (SPC), extended to another company. The
nonrecourse loan backs not only MF2 Alpha's class B ABL, but also the class A1
to A4 senior ABLs (initial issue amount: JPY25.4 billion) issued under the MF2
Senior Loan transaction.
Morgan Stanley Japan Securities Co. Ltd. arranged this commercial
mortgage-backed securities (CMBS) transaction. The rating reflects our opinion
on the likelihood of the full payment of interest and the ultimate repayment
of principal by the transaction's legal final maturity date in April 2014 for
the unsecured bonds.
RELATED CRITERIA AND RESEARCH
"CMBS Global Property Evaluation Methodology," Sept. 5, 2012
"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
Godo Kaisha MF2 Alpha
JPY7.0 billion unsecured bonds due April 2014
To From Initial issue amount
CCC- (sf) CCC (sf) JPY7.0 bil.