Jan 29 - Fitch Ratings has downgraded Infinity 2007-1 (SoPRANo)'s junior
commercial mortgage-backed floating rate notes (CMBS) ratings, as follows:
EUR490.9m class A (FR0010478420) downgraded to 'AAsf' from 'AA+sf'; Outlook
EUR39.6m class B (FR0010478438) downgraded to 'Asf' from 'AAsf'; Outlook
EUR31.2m class C (FR0010478446) downgraded to 'BBsf' from 'Asf'; Outlook
EUR25.6m class D (FR0010478453) downgraded to 'Bsf' from 'BBBsf'; Outlook
EUR31.2m class E (FR0010478479) downgraded to 'CCsf' from 'BBsf'; Recovery
The downgrade reflects Fitch's increased negative perception of the secondary
German retail market, an asset type that characterises the collateral in EHE
Pool 1A, the largest loan in the transaction which accounts for 57.4% of the
aggregate pool balance. Although the loan is currently sweeping all excess cash
and senior coverage remains strong at 2.36x, the agency fears that a lack of
asset sales over the past year (which is likely to trigger a breach of the
October 2013 EUR60m disposal threshold, a condition required to extend the loan
for a further 12 months) highlights a further deterioration in investor appetite
for secondary assets. As such Fitch believes the collateral backing the loan is
not immune to further declines in value, which would further increase the
current securitised and whole loan loan-to-value ratios (LTV) currently at
119.9% and 137.9% respectively.
The servicer Capita Asset Services ('CPS2+'/'CSS2'), has waived an event of
default under the EHE pool B loan (10% of aggregate pool balance) caused by
failure to meet the October 2012 disposal targets, and has chosen the option of
a managed sell down with reviews every six months, a process that was envisioned
at the October 2011 extension and restructure. Although Fitch normally views
retaining the active involvement of borrowers as a positive in protecting
collateral value, in this case the waiver has prevented a switch to sequential
pay-down from the current modified pro-rata rules. The agency believes this can
be detrimental for the senior class of noteholders, particularly in a scenario
where large assets are sold prior to the switch in the principal waterfall being
Since the last rating action in January 2012, the EUR186.2m Leipzig loan repaid
in full in a modified pro-rata fashion. The loan was backed by a large good
quality shopping centre in Leipzig. The agency did not expect any losses under
Of the remaining loans, eight are scheduled to mature in 2016 and, with the
exception of the Massy loan (a 74.2% LTV loan backed by a large retail warehouse
in the outskirts of Paris and contributing 4.7% of the pool balance), they can
be characterised as low risk due to the low LTVs and high coverage levels.
Infinity 2007-1 (SoPRANo), which closed in May 2007, is a synthetic
securitisation which contains 14 commercial mortgage loans originated in
Germany, France and Spain by Natixis ('A+'/Negative/'F1+') and Capmark AB No.2.
Fitch will continue to monitor the performance of the transaction. A performance
report will be published shortly on www.fitchratings.com.
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.
The sources of information used to assess these ratings were the issuer,
servicer, and periodic cash manager and servicer reports.
Applicable criteria, 'EMEA CMBS Rating Criteria' dated 4 April 2012 are
available at www.fitchratings.com.
Applicable Criteria and Related Research:
EMEA CMBS Rating Criteria
(New York Ratings Team)
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